November/December 2012

GBNov2012_FinalHR_Cover.pdf

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2012-11-12

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November 2012 Vol 2 | No 5 $9.95

SUPER MARKET

The Store is the Star

PM # 42211029

The Art + Science of Flyers UGI’s 40th Anniversary grocerybusiness.ca

B:9.5” T:9” S:8”

Opa! (Yes, we’re celebrating.)

Ad Number: PAM_AST_P121604 Publication(s): GroceryBusiness This ad prepared by: SGL Communications • 2 Bloor St. West, Toronto, Ontario • phone 416.413.7495 • fax 416.944.7883 File Location: SGL_N-Z:Volumes:SGL_N-Z:Parmalat_SPQ COR:I29235-Astro Greek Yogurt:PAM_AST_P121604.indd

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Client: Parmalet Canada Creative Name: Astro Greek Yogurt Agency Docket #: PAM AST I29235 Main Docket #: SPQ COR I29235 Art Director: Paul Wiersma Copy Writer: None Print Production: John Silva Retoucher: None Live: 8” x 9.875” Trim: 9” x 10.875” Bleed: 9.5” x 11.375” Artwork Scale: 1:1 Print Scale: 100%

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astro.ca Trademarks owned or used under license by Parmalat Canada Inc., Toronto, ON, M9C 5J1.

B:11.375”

S:9.875”

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November 2012 Volume 2, Number 5 www.grocerybusiness.ca Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca 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 Managing and Online Editor Noelle Stapinsky Contributing Editors Sally Praskey, Angela Kryhul Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca

Grocery Business Advisory Council Bill Dunne, Acosta Canada Phil Donne, Campbell Company of Canada John Scott, Canadian Federation of Independent Grocers

publishers’MESSAGE The recent cases of E. coli linked to contaminated beef at XL Foods have served notice that it’s time to reconsider irradiating meats. Considering the significance of the public health risk and the damage to Canada’s international reputation as a grade A food exporter, this simple solution would help to resolve both of these major issues.

Back in 2002, Health Canada received submissions to irradiate fresh and frozen ground beef, fresh and frozen poultry, and prepackaged fresh, frozen, prepared, and dried shrimp and prawns, to control pathogens and extend durable shelf life. After an extensive review, Health Canada scientists concluded that the consumption of those irradiated foods would not result in any risk to the health of the consumer or any loss of nutrients. Consequently, industry stakeholders and the Canadian Food Inspection Agency recommended that Health Canada approve the irradiation of these products.

So what happened? “Because of significant public concerns related to irradiation, Health Canada did not move forward with regulations at that time,” Christelle Legault, media relations officer at Health Canada, told Grocery Business.

And now, grocers are paying the price as consumers shy away from purchasing beef.

Currently, only potatoes, onions, wheat, flour, whole wheat flour, whole and ground spices, and dehydrated seasoning preparations are approved for irradiation in Canada. The U.S., on the other hand, approved the irradiation of red meats in 2000, and poultry in the early ’90s.

Further, international bodies such as the World Health Organization (WHO) and the Food and Agriculture Organization (FAO) of the United Nations have stated that the food irradiation process is one method of reducing pathogenic bacteria, other micro-organisms and parasites that cause food-borne illness and disease. It would also destroy E. coli O157:H7 in ground beef.

Perry Caicco, CIBC World Markets Nancy Croitoru, Food and Consumer Products of Canada Tim Berman, Kraft Canada Inc.

Irradiation would require a major consumer education effort on the part of grocers and suppliers, but it would be to the benefit of all parties. “If consumers are first educated about what irradiation is and why it is done, approximately 80 per cent will buy the product,” says the Health Canada website.

Mark Ayer, Procter & Gamble Inc. David Wilkes, Retail Council of Canada

So where’s the irradiated beef?

Cori Bonina, Stong’s Market Michael Marinangeli, MIDEB Consulting Inc. © Copyright 2012. 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

karenjames@grocerybusiness.ca kevinsmith@grocerybusiness.ca grocerybusiness.ca Follow us on Twitter @grocerybusiness

Grocery Business November 2012 Volume 2, Issue 5

contents DEPARTMENTS 5 8

Publishers’ Message

15 Perspective

Front End

11 Collaboration

20

BNPA and Walmart partnership – a triple win

13 Open Mike

Category managers – the quarterbacks of grocery

Counterfeit and illegally labelled products

20 Shelf Life: Sweet Talk

Natural sweeteners are on the rise

46 Launch It, List It

Check out the latest new products

56 It Figures

Consumer consciousness

58 Perry’s Point of View

29

Food inflation and the Grey Cup

ON THE COVER

22 A family-run independent grocery chain ups the ante Longo’s in Locomotion

on the conventional format by transforming a historic railway building into a market-style food theatre

52

19 FEATURES 19 Speed Dating in the

Tradeshow World

High value networking

22 Longo’s in Locomotion

A theatre of food in Leaside

29 Taking a Flyer

The art and science of flyers

35 Holy Crap! Business is Good

44 Point of Purchase:

It’s all relative

48 Grocery Innovations Canada

Award-winning retailers

56

52 GIC: Live from the show floor 54 United Grocers Inc.

Celebrates 40 years

Hapifoods’ organic success

38 Advantage Mirror Report

Vendors voice their views

43 Leaders on Leadership

Tree of Life’s Jamie Moody talks leadership

grocerybusiness.ca

November 2012

7

Front End

And the Band Played On . . .

Bandmates, clockwise from left to right: Brian Kerr, Dave Iacobelli, Craig Vendramin, Michel Guay

The band Tuesday Noon was founded in a basement in downtown Toronto by four guys, all employees of Kraft Canada at the time, drawn together by their love of playing music. Each was a seasoned musician who had spent his youth playing in pubs, bars, and at house parties – any venue he could find, just for the thrill of making music.

Throughout the years, various members have come and gone, each leaving his unique mark on the band’s sound. Craig Murray eventually went solo, while Michel, Craig Vendramin, and Dave continued on until few of years ago when Brian Kerr joined the group and added his larger-thanlife vocals.

Michel Guay, Craig Murray, Dave Iacobelli (now with Mondelez), and Craig Vendramin formed Tuesday Noon in the winter of 2003, managing to carve out an hour most Tuesdays at noon to jam, laugh and share their polar-opposite musical influences with one another.

Recently, the band composed a song, Looking Forward (To Looking Back), and created a video to mark the split of Kraft Canada into Kraft Foods and Mondelez.

MUSICAL NOTES Watch the Looking Forward (to Looking Back) video on YouTube or on the Grocery Business website: grocerybusiness.ca.

Check out Tuesday Noon on Facebook and Twitter facebook.com/tuesdaynoon 8

November 2012

@tuesdaynoonband

THE BAND RIFFS ON TUESDAY NOON AND THE GENESIS OF THE VIDEO “The name Tuesday Noon came about because, while some people in the Kraft Canada sales office went for walks, worked out, etc., the band would jam acoustically over the lunch hour every other Tuesday. As with many bands, a gig approached and we needed a name…not sure if there was consensus on the name but it has stuck.

“The song in the video Looking Forward (To Looking Back) was written with the intent of making a video to bring out the imagery mentioned in the lyrics – imagery that would be familiar to the audience (Kraft Sales Awards, our products, Cadbury Bunny). The storyline was primarily developed with our sales communications team with some additional help from the studio we used to film video.

“The video shoot took about six hours from start to finish. We made a couple of edits after the draft was presented to us and then we were done. It was shot at our rehearsal space in downtown Toronto.

“The band has been together for close to 10 years – we all have young, busy families, and we tend to only jam about once a month now and take the summers off.”

When we asked the band members if they intended to continue playing together despite the corporate split, the answer was a very firm “absolutely!”

Grocery People Christine Vickers Tucker is now vice-president and general manager for the Clorox Company of Canada Ltd. Tucker joined the company 18 years ago, and replaces Mark Malo who has taken the position of vice-president of sales in the U.S. Chris Kempczinski is the new president of Kraft Canada. He joined Kraft in 2008 and, prior to leading the Canadian operation, worked in various roles in the U.S. Ian Roberts has assumed the role of vice-president of sales at ConAgra Foods. Roberts was formerly the director of market development for the Canadian operation of ConAgra Foods.

Rick Winslow was recently appointed as vice-president of client services at Nielsen, while Mike Ljubicic has been named vice-president of retail services.

Scott Reynolds is now Minister-Counselor for Agricultural Affairs for the U.S. Department of Agriculture in Canada.

Reynolds’ prior posting was with the USDA in Moscow.

Chris Damiano has joined the Health Check team as a business development manager working directly with CPG companies on their Health Check initiatives.

grocerybusiness.ca

Front End

Phil Lanzarotta is leaving Kellogg Canada after 11 years to take on the role of president of RxMedia, a healthcare communications company in the pharmaceutical industry.

West Van gets first Fresh Street Market

Greg Farrell is the new president and chief operating officer of Giant Tiger Stores Ltd. He joined the company in 2000, and has held the roles of executive vice-president and chief financial officer.

Taking over a former Safeway location, this retail concept will offer 70 per cent produce and meat and 30 per cent grocery.

Dare Foods Limited recently appointed Peter Luik as president.

Luik, who joins the company with 23 years of experience in food brands, is the sixth Dare president in 120 years.

As a first of its kind, H.Y. Louie plans to open its new Fresh Street Market grocery store in West Vancouver by the end of November.

A spokesperson for H.Y. Louie, which owns IGA and London Drugs, told B.C. newspapers that this store is focused on fresh rather than the usual even split between groceries and fresh foods found in conventional grocery stores.

After 12 years as the chief operation officer of the Retail Council of Canada, Bill Yetman has left to join the Bicycle Trade Association of Canada as executive director.

3M Canada announced that Paul Madden has been appointed president and general manager. Madden joined 3M Canada in 1988 and succeeds Brian Young, who has assumed the role of vice-president, Global Sales Operations for 3M Company based in St. Paul, Minn.

Alain Bouchard, CEO of Alimentation Couche-Tard Inc., has been named as Canada’s Outstanding CEO of the Year for 2012 by Caldwell Partners.

The Grocery Foundation’s Night to Nurture Gala is the most exciting evening on the industry’s calendar. Book your tickets today. Better yet, book a table! It’s all in support of the Grocery Foundation and Kids Help Phone.

This year’s gala, takes place on February 2, 2013 at the Metro Toronto Convention Centre. Book now to take advantage of the $179 early bird rate.

Contact the Grocery Foundation for more information: groceryfoundation.com; 416-515-8265

November 2012

9

Front End

IT’S A WRAP! Check out this all-in-one stretch wrapping machine from Bizerba, which was featured at Grocery Innovations Canada, 2012. The GLM-E is designed to efficiently and hygienically wrap, weigh and label fresh items and is a terrific solution for a retailer with an in-store operation .

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Mediacorp Canada Inc. has named Loblaw Companies Limited as one of Canada’s Top 100 Employers for the fourth year in a row. As the only grocery retailer on the list, this honour recognizes the company’s efforts in employee engagement. . . . . Mondelez International, Inc. plans to invest $200 million by 2020 to make its coffee business more sustainable with its “Coffee Made Happy” program. . . . . Ontarians are shifting to more responsible consumption practices by eating, buying and acting green, according to a new index of consumption behaviours. The Ontario Responsible Consumption Index gave Ontarians a benchmark score of 68.9 [or C+] across a wide range of purchasing behaviours. . . . .

Thirty-nine U.S. and Canadian-based supply chain associates from PepsiCo North American Foods were honoured as PepsiCo’s top performers worldwide with induction into the Chairman’s Circle of Champions. Three Canadians were included in the winners’ list: Randall Farris, Craig Richardson and Keith Sorensen. . . . . A new Statistics Canada report reveals that supermarkets and other grocery stores had a strong sales increase in August, up six per cent over last year. . . . . In response to a request by Quebec’s language office demanding big retailers add French to brand names, the Quebec chapter of the Retail Council of Canada is taking the Office québécois de la langue française to court to challenge the way the language agency has been interpreting and applying the law. . . . . Toronto Dominion Bank Group has entered an agreement with Target Corporation to acquire Target’s existing U.S. Visa and private-label card portfolio, with a current gross outstanding balance of US$5.9 billion. . . . . Metro Inc. has agreed to sell its Distagro foodservice division. . . . . Sobeys Inc. was recently recognized for its $1.6-million investment in energy-efficient lighting upgrades in 42 of its Ontario stores. Sobeys estimates that it will reduce its annual energy and maintenance costs by $400,000. . . . . Square, the free mobile credit card reader by Twitter co-founder, Jack Dorsey, is coming to Canada. Launched in the U.S. in 2010, the small, square, smartphone attachment allows businesses to accept credit card purchases on the fly. . . . . Statistics Canada reports food prices have been increasing steadily since the second quarter of 2010. John Scott, president and CEO of the Canadian

If you’re interested in finding out more go to www.bizerba-na.com

10

November 2012

Federation of Independent Grocers, reports that Canadian consumers can expect a three-to-four per cent increase in 2013. . . . .

Collaboration

MEMO To: Karen James, Grocery Business Magazine From: Felicia Fefer, Manager, Walmart, Corporate Affairs We are excited and proud to be partnering with the Best New Product Awards because it is one of Canada’s best known and trusted consumer packaged goods awards programs.

And as Canada’s most-shopped retailer, serving more than a million customers daily in 365 stores nationwide, customers expect us to carry the latest and greatest products – and we do. This partnership will allow us to showcase these items and solidify our role as a destination for innovation.

Walmart will be supporting the BNPA with a number of activities including in-store, flyer and digital support.

Grocery Business spoke with Robert Levy, president of BrandSpark Canada and founder of the Best New Product Awards (BNPA) about the significance of this partnership:

Grocery Business: What are the major benefits for BNPA and Walmart?

It’s really a triple win: Walmart wins; the Best New Product Awards win; and most importantly Canadian consumers win. Walmart strives to educate their customers about the best of what’s new and innovative in the market and the Best New Products Award winners dovetail perfectly with this.

And as an added bonus, we’re very pleased that Walmart’s customers will be able to contribute to BrandSpark’s Canadian Shopper Survey.

GB: We see the BNPA logo everywhere in the consumer press! Can you describe who your media partners are?

Our media coverage is extensive. Our partners include Canadian Living, Coup de Pouce and Metro newspapers; TV broadcast partner Shaw supporting the program with Global TV; the Food Network, HGTV, Slice; plus our out-ofhome partner, Astral.

We also have some unique on-the-go offerings with one of our newest partners, Play Taxi Media, and more than 3,000 screens in taxis across Canada.

GB: We understand that the BNPA has a major milestone coming up.

Yes, and we’re excited to announce that next year marks the tenth anniversary of the Best New Product Awards and what better way to celebrate than by bringing our 2013 BNPA winners exclusive promotional opportunities with Walmart?

GB: What are the elements that have made the BNPA so credible?

From the beginning we have worked hard to create the most trusted consumer-based awards program in Canada. We are the only awards program that is CPG-focused, run by an independent research firm, judged by consumers and strongly endorsed editorially by our respected media partners.

Congratulations to you both; we’re looking forward to seeing the exciting promotional activity you’ll create. grocerybusiness.ca

November 2012

11

Open Mike

Skilled category managers create a competitive edge

By Michael Marinangeli

I have often said there are many similarities between sports and business. It’s hard to win if you don’t have the right people playing key positions. In hockey, it’s goaltending; in football, it’s the quarterback; and in baseball, it’s pitching. Well, in retail, great category managers are a competitive advantage that’s hard to beat.

Being a great category manager requires skills beyond being just a good buyer

Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. mjmarinangeli@gmail.com

grocerybusiness.ca

So why is this role so important? Think about the areas of responsibility they influence that have a direct bearing on the sales and profit of your organization. These include assortment, pricing, promotion and shelf placement. Doing it right builds customer loyalty and satisfaction, and makes a big difference to your P&L. Being a great category manager requires skills beyond being just a good buyer. After all, these people often manage categories well over $100 million a year in sales. And the proper deployment of shopper insights has a great influence on how buying and merchandising decisions are made.

In an ideal world a category manager has: • post-secondary education, with strong analytical skills and understanding of the financials (business major preferable); • store-level experience; • interpersonal and collaborative skills; • above-average negotiation skills; • knowledge of marketing and research; • understanding of logistics and supply chain.

There are many pivotal roles in retail, but few impact so many facets of the organization. I was blessed early in my career in merchandising to work with and learn from some of the best category managers in the industry. I saw first-hand the extent to which highly-effective people in this area can impact the overall results. Great category managers not only satisfy customer needs, they often attract the best manufacturers’ reps. Together, they make better decisions.

Do you make your money on the buy or on the sell?

I say you make it on both. It is incumbent on today’s leaders in category management to recruit, train and retain the best talent available. I am astounded at how category managers are often shuffled from one group of categories to another. It takes a minimum of two years for a category manager to become fully knowledgeable in his or her categories. The same can be said for the supplier side of the desk.

Stability is also a key factor in achieving a competitive advantage, so there needs to be succession planning, along with mentoring, to ensure that knowledge is shared and retained in the organization. Millions of dollars are lost each year when this learning and experience are allowed to disappear.

Invest in your category managers. Make sure you have the best available talent on board. You’ll gain a competitive edge that will make other facets of your organization shine as well.

November 2012

13

For organizations involved in all aspects of the life cycle of packaging, this is THE MUST ATTEND conference of the year.

Great Packaging Sells 2013 Call for Entries

Excellence in Innovation & Design PAC Leadership Awards give industry-based, peer recognition across North America for excellence in all formats of packaging, in branding and graphic design, in technical aspects and in sustainability. Not only is the PAC competition the longest running competition in North America but PAC was the first to initiate the Sustainable Packaging competition in 2008. Further innovations this year give greater recognition to the long-established importance of packaging in Shopper

In-Store Marketing categories

Marketing.

• Display Merchandiser • Display Ready Packaging

Axe Twist Floor Stand

• Display Ready Pallets • Retail Ready Packaging Visit pac.ca for details on all 13 Competition categories

Media sponsor:

Celebrate with Industry Leaders at the Awards Gala on Earth Day - April 22, 2013 Important dates

•December 14, 2012 - early bird deadline for all entries

• January 22, 2013 - final entry deadline

Industry leaders endorse PAC Leadership Awards “This is a truly unique opportunity for marketers, designers and printers to show the industry what they are doing. As a longtime participant in the PAC competition we have seen value in many ways; from giving the recognition that our designers deserve, to thanking our clients for the great work they entrust to us, to showing appreciation to our printer partners.”

“The PAC Leadership Awards has been setting the industry benchmark on how important strategic thinking, innovation, technical excellence, and sustainability all play a role within a products life cycle.”

Andrew Laufer Molson Coors Canada

Linda McGregor, VP Client Service, Davis Contact Lisa Abraham at 416.646.4640, labraham@pac.ca for more information.

Visit www.pac.ca/index.php/pac/competiton for more information

Perspective

Counterfeit and illegally labelled products: A growing concern for Canada’s food and consumer product manufacturers

By Nancy Croitoru, President and CEO, FCPC

The licensing scheme will strengthen the CFIA’s powers to identify and punish importers who are not playing by the rules.

Food & Consumer Products of Canada is Canada’s largest industry association representing the companies that manufacture and distribute the vast majority of food, beverage and consumer goods found on store shelves.

Learn more at fcpc.ca. grocerybusiness.ca

Buyers beware – counterfeit and illegally labelled products are increasingly making their way into the Canadian marketplace posing a serious threat to businesses and most importantly, to consumers.

Canada’s food and consumer products manufacturers’ number one priority will always be the safety and integrity of our products and that’s why we are very concerned about the growing presence of counterfeit goods appearing in the Canadian marketplace.

Illegally labelled products might have non-compliant allergen labels or lack allergen labelling altogether, illegal health claims, no bilingual labeling, no Canadian Nutrition Facts table, and the possibility of ingredients that are not approved for use in Canada.

Counterfeit products look almost exactly like the legal product but the difference is that they haven’t gone through the rigorous safety checks and testing that legal products pass. And they are definitely not approved for sale in Canada and can be, in the most extreme cases, a risk to human life.

Given the threat posed by these illegal products, it’s critical that all partners along the supply chain be aware and be willing to work together to tackle the threat to the marketplace and to consumers.

Food & Consumer Products of Canada (FCPC) has increased its efforts in working with the Canadian Food Inspection Agency (CFIA), the body responsible for enforcement of Canada’s food labelling laws, and Health Canada to keep these products out of the marketplace.

For CFIA inspectors, much of the challenge has been getting to the importers who are bringing these products into Canada. FCPC has been active in supporting CFIA’s move to create an importer licensing scheme which will hopefully be implemented next year. The licensing scheme will strengthen the CFIA’s powers to identify and punish importers who are not playing by the rules.

When it comes to counterfeit consumer products, it’s not only FCPC’s affected member companies that have taken note - the Royal Canadian Mounted Police (RCMP) have as well.

In the RCMP’s 2011 Intellectual Property Crime Stats Report, Canadian law enforcement noted that the percentage of occurrences involving harmful counterfeit products has more than doubled over the past six years - from 11.2 per cent in 2005 to 25.8 per cent in 2011.

We support the Harper government’s move forward with comprehensive anti-counterfeit legislation that will provide the Canada Border Services Agency with the independent authority to target, detain, seize and destroy counterfeit goods.

FCPC is joining a number of industry partners, including those from the Canadian Anti-Counterfeiting Network, to encourage the federal government to act now.

It’s time to get serious about counterfeit goods in Canada.

November 2012

15

Enhanced capabilities

Expanded marketing solutions

Superior client performance

Stronger platform

Our addition.

Your benefit.

Acosta and Mosaic unite to better serve you.

In order to stay on top of the ever-changing retail environment, Acosta is growing. By joining forces with Mosaic Sales Solutions, we are able to offer our clients and their customers bigger, better experiences. Plus, with experiential marketing and digital services we have more solutions for even greater sales potential.

It’s why even more trusted brands trust us.

Learn more at www.acosta.com/mosaic

Bill Dunne, president of Acosta Sales and Marketing

UNITING SYNERGIES Acosta Sales and Marketing president, Bill Dunne discusses the recent acquisition of Mosaic Sales Solutions and how this unique partnership amplifies its client menu options and expertise.

What does this acquisition mean for Acosta Sales and Marketing and its current clientele?

Bill Dunne: By joining forces with Mosaic Sales Solutions, a leading agency specializing in connecting brands with consumers, we’re able to offer an expanded set of marketing solutions with expertise in experiential marketing and digital services. Taping into this expertise will allow us to bring more value and solutions to our current clients.

This new partnership will certainly allow Acosta to have a unique and significant point of difference – relative to our competition – on how we offer up a menu of services.

The sum of our parts creates, in my mind, a more strategic relationship driven organization. And there are many new business opportunities as we look at each individual business unit across the Acosta, Mosaic portfolio.

What are Acosta’s plans in terms of integrating the two businesses?

Bill Dunne: It’s business as usual for both companies. Our respective leadership teams are in discussions on creating synergies and proper integration in due course. We want to take the Acosta and Mosaic goto-market strategies and bringing them together as a value. I believe we are going to compliment each other extremely well in terms of both companies’ expertise and business models.

How does Mosaic’s recent acquisition of Hunter Straker further enhance the overall offering?

Bill Dunne: Hunter Straker further strengthens Mosaic’s existing shopper marketing service offering with 50 years of experience in the retail category. The new combined offering brings increased value to the clients of both agencies. This acquisition offers a comprehensive suite of sales and marketing services under one roof, at a time when effectiveness and efficiency in agency relationships is of paramount importance.

What is Acosta’s overall vision and strategy moving forward?

Bill Dunne: We will continue to drive our strategic priorities around leadership as a trusted partner. We will also continue to represent more number one and number two brands and their respective categories in the Canadian grocery retail market place, through being a trusted advisor, through our strategic leadership and through our reach.

We are blessed with having some of the best people in the Canadian grocery industry working for our company. They have extremely high integrity, great relationships with our customers and clients, and have continuously driven results. Built on the foundation that was led by Peter Singer, we’ve been very fortunate to continue to grow and build on what was started in 2001.

We are dedicated to helping our clients win in an ever-changing retail environment and to become a one-stop shop for even greater sales potential.

Almost 900,000 CAnAdiAns rely on food bAnks every month This number is simply unacceptable.

That’s why Food Banks Canada is working with businesses like yours eliminate hunger in Canada.

You can be part of the solution. Contact Food Banks Canada today and find out how you can make a donation of food or funds.

www.foodbankscanada.ca • 1-877-535-0958 /FoodBanksCanada @foodbankscanada

Show World

SPEED DATING IN THE

TRADE SHOW WORLD

By Ken Kwong

In today’s hectic business environment securing new business opportunities can be a daunting task for both buyer and seller, which is why trade shows are such a powerful lever. But with so much activity swirling around the trade show floor, how do exhibitors and attendees connect in the most efficient way? Well, if you’ve ever attended shows put on by the National Association for the Specialty Food Trade (NASFT), you may be aware that they have a unique solution called “Business Builders 1-to-1” which is one of the value-added services available to both attendees and exhibitors.

Held on the Saturday prior to the three-day Fancy Food Shows (both East and West versions), the Business Builders sessions operate much like a speed dating event. The program is specially designed to pair up show exhibitors on pre-arranged ten minute sessions with retail buyers, brokers and distributors who are interested in purchasing the seller’s products.

As an exhibitor, signing up for these sessions is as easy as locating the Marketing Tool Kit in the Exhibitor Services area of the NASFT website, which helps you with presentation tips to maximize your 10 minute sales pitch. The website also asks you to state your criteria so a match with appropriate buyers can be made. You are also allowed to request meetings with specific buyers as their schedule permits.

grocerybusiness.ca

As an attendee, you are eligible to participate if you are a retailer, distributor, broker or foodservice buyer that is actively looking to procure products from Fancy Food exhibitors.

Buyers select their top product categories and through an online matching system are provided with a schedule of up to 17, 10-minute meetings with exhibitors who meet their criteria. You are allowed to review these matches one month before the event and select who you wish to meet. If you cancel a selection the system automatically fills in the empty slot with another appropriate match. Exhibitors cycle through in 10 minute sessions, over the course of three hours.

Since NASFT instituted the program two years ago I’ve sat on both sides of the table and know firsthand how much it helps everyone get the most out of their trade show experience.

Both parties benefit from a quality pre-meeting before the show gets in full swing and the rapid fire nature of the experience helps sharpen presentation skills and buying prowess.

And most importantly, orders are written - mission accomplished!

Ken Kwong Ken Kwong is a senior brand manager and category specialist for National Importers.

His opinions expressed in this column are solely his own and do not necessarily represent those of this publication and his employer. Ken can be reached via Twitter (@kenkwong), email (kenkwong808@gmail. com) or on LinkedIn.

November 2012

19

Shelf Life

SWEET TALK

By Noelle Stapinsky

Move over table sugar and artificial alternatives, today’s consumers are much more focused on natural, pure and organic alternatives. And with a flux of innovative products hitting the market, the natural sweetener category is about to get a whole lot sweeter. To capitalize on this growing segment, retailers will need to react quickly to meet consumer demand.

Agave nectar and stevia plant leaves

PENDING APPROVAL?

Sweetening Sales The natural segment is growing rapidly with the introduction of alternatives such as stevia, agave nectars, organic sugars and natural sugars. “We see these sweeteners entering the market and the innovation happening in those arenas as well,” says Justin Urso, national account manager for Equal U.S. & Canada, Merisant, which launched Pure Via stevia sweetener in the U.S. and France in 2009 and other European markets in 2010.

“In the past 30 years we’ve basically only seen three sweeteners dominating the market,” says Urso. But now, with over 50 SKUs already on the market in the natural segment, he says, “The marketplace is changing, ingredients are changing and the consumer is far more educated about these products. Retailers will need to react quicker than they have in the past.”

Although the use of stevia has been in the Health Canada approval process for a number of years, there are some stevia products that have gained exemptions. Health Canada’s website states, “stevia leaves without health claims can be sold in Canada to a consumer wishing to use this product for personal culinary use only. As an aside, stevia along with its extracts have been approved by Health Canada for use both as non-medicinal ingredients, and as medicinal ingredients in certain natural health products.”

Bee Sweet Honey has long been a pantry staple in many Canadian homes. The natural golden liquid is purchased up to two times per year, with a 40 per cent penetration in Canadian homes, according 2011 Nielsen data.

BeeMaid, an Alberta-based beekeeper cooperative, recognized an opportunity in singleserve packaging and launched Li’l Honeys in 2011. “We’ve spread over 7.5-million portions of sweetness across Canada,” says Kristin Moore, marketing manager for BeeMaid.

Debuting in Starbucks locations across Canada, these single-serve packets are also a healthy natural solution for time-starved parents and their children’s lunches.

20

November 2012

Shelf Life

Pure Alternatives

Coconut Confidential

Savvy consumers have done their research and natural sweeteners with exotic names such as stevia, truvia (a stevia extract), and erythritol are quickly gaining acceptance in North American households. Shoppers seek healthy, natural alternatives that are not only low in calories, but also have a flavour profile.

As guilt-free alternatives battle it out for a spot in the market, coconut palm sugars have gained considerable attention as a low-carb, natural option that is more nutritious than granulated sugar.

“Palm sugar comes from the nectar of the coconut blossom. The nectar is collected, boiled and granulated,” says Henry Gallwitz, national sales manager of Organika Health Products Inc. “Organika’s natural coconut palm sugar is certified organic, has no artificial flavours, and has a glycemic index of only 35 compared to white sugar, which has an index of 65.”

While the calories in palm sugar may be close to table sugars, palm sugar is notably higher in various micronutrients because it’s not as processed.

“The market is growing at an unprecedented rate as consumers look to cut their sugar intake – the sweetener market in Canada is a $1.5-billion industry,” says Gallwitz.

Organika’s Coconut Palm Sugar was recently voted as one of the top 10 Most Innovative Products at Grocery Showcase West. And this natural alternative is also available in handy single-serve sachets.

“The growth of this category is driven by the consumers.

They want a great-tasting sweetener with zero-carbs, zero-calories, and zero glycemic index,” says Jim May, CEO and founder of SweetLeaf stevia sweetener.

Stevia, a South American herb that’s been used as a natural sweetener for centuries, is 30-times sweeter than sugar. Produced as a fine powder, this sweetener can withstand both hot and cold temperatures, and be used for cooking or adding sweetness to beverages.

Sugaresque, distributed by Quebecbased I-D Foods, contains a mix of stevia and erythritol, a naturally occurring sweetener derived from fruits and fermented foods.

“When we set out to develop the product, we had the criteria that it had to be all natural, zero-calorie, it had to taste good and resemble sugar in taste and texture,” says Philip Issenman, president of I-D Foods.

THE SKINNY ON SWEETENERS Dollar Sales

Dollar Sales Percent Change vs Year Ago

Unit Volume

Unit Volume Percent Change vs Year Ago

SUGAR SUBSTITUTES

$54,108,746

-2%

8,642,202

-3%

Sucralose

$32,846,828

-7%

3,749,690

-8%

Cyclamate

$10,171,513

-11%

3,119,405

-10%

Other Types Of Sweetener

$8,338,281

57%

1,355,134

54%

Aspartame

$2,456,501

-8%

386,470

-8%

Saccharin

$295,623

-8%

31,504

-5%

SUGAR

$221,400,306

3%

71,965,102

5%

White

$136,997,075

4%

45,110,443

8%

Brown

$64,237,666

1%

19,354,530

2%

Icing

$19,801,212

2%

7,387,845

-1%

Remaining Types

$364,353

-16%

112,285

-1%

HONEY

$90,665,085

3%

14,416,397

1%

Nature’s New Contender Monk fruit is the newest kid on the sweetener block, and it’s gaining momentum fast. As a fruit extract, this natural sweetener touts zero-calories and no bitter aftertaste.

A vine-ripened fruit native to Asia and used there for hundreds of years, monk fruit is packed with antioxidants and vitamins. When it was deemed safe by the U.S. FDA in 2009, usage of the sweet extract, in various products and as a sweetener, spiked.

Source: The Nielsen Company National Market Excluding Newfoundland, All Channels All Channels Consists Of Grocery Banner + Mass Merchandisers + Drug + General Merchandisers + Warehouse Club 52 Weeks Ending August 25, 2012

grocerybusiness.ca

November 2012

21

All aboard: Destination Longo’s Leaside

Toronto’s Leaside neighbourhood – originally named after 19th-century farmer William Lea, one of the first settlers in the area – has historical links to the Pacific and Canadian Northern Railways.

1894

1912

1913

A rail station was established in “Leaside Junction.” Canadian Northern Railway acquired holdings in the area to develop a repair shop and marshalling yard for its Eastern Lines.

Canadian Northern announced it would establish a residential community in the area and commissioned Montreal landscape architect Frederick Todd to model the town.

The Town of Leaside was incorporated with a population of 43. Money from selling the land would fund the railway’s maintenance facility.

IN

LOCO MOTION

By Noelle Stapinsky

A family-run independent grocery chain ups the ante on the conventional format by transforming a historic railway building into a market-style food theatre.

While the writing may be on the wall for conventional grocery stores, the new Longo’s flagship supermarket in Toronto’s upscale Leaside neighbourhood is anything but traditional. At its heart, this is a neighbourhood store and yet it resembles a high-end food emporium or a swanky New York-style marketplace; it’s a store brimming with excitement and customer engagement.

Housed in a vintage-1919 building that was originally a service shop for steam locomotives, the store’s soaring 40-foot ceiling and giant multi-pane windows give it an air of spaciousness and old-world elegance, while its market-style sections impart a chic-boutique ambiance.

Upon entering, customers are greeted with exciting sights and scents. Clearly, this store is made for exploring.

First up are vibrant floral arrangements, a Peller Estates wine shop, and a Starbucks coffee kiosk with café seating. A flight of stairs adjacent to the entrance leads to the loft, which is home to Corks a fully licensed, Wi-Fi-enabled restaurant serving up locally crafted wine and beer to complement its full-service menu. From this second-level perch – where the store also has a facility to run cooking classes and host special events – customers have a bird’s-eye view of the entire supermarket.

1919 The steam engine locomotive shop was built with tall windows, shallow buttresses and 12 service bays – typical to engine house design.

1927

1930

2012

The Leaside shop declined in importance when Toronto’s Spadina Avenue rail yards and shops opened.

The locomotive shop officially closed. The building was later used by E.S.&A. Robinson packaging company until 1954.

The grand building has been refurbished and opened by Longo’s independent grocery retailer as its 25th grocery store in the Greater Toronto Area. This building is the largest surviving structure of the former Leaside terminal.

MAKING HISTORY To preserve the building’s historical grandeur, while transforming it into an elegant grocery retail environment, Longo’s commissioned Watt International Inc., a Toronto-based retail design firm.

Jean-Paul Morresi, Watt creative partner, discusses some of the unique design challenges and inspiration involved in Longo’s new historic property.

RESPECTING HERITAGE Maintaining a respect for the building’s history – and revealing it – required the entire team to be very fluid and flexible in the interpretation and application of the vision for the store.

The strength of the building’s character certainly forced the team to consider how the DNA of Longo’s existing retail concept could be retained in the face of such distinct and powerful conditions.

Since history, tradition and craft are all part of Longo’s DNA, it was not too difficult to find ways to align the Longo’s traditions with the history of the site.

FORMS AND FUNCTION Specific challenges were numerous – dealing with governmental agencies and processes, managing sightlines and building volumes, and retaining a sense of the character of the original space once it was occupied by a grocery store.

New conditions presented themselves almost daily. But I have to give credit to the Longo’s team for their ability to maintain momentum, and their openness to improvisation and rapid decision-making as the building conditions revealed themselves.

STRUCK BY LIGHTING The scale of some of the spaces was also challenging. While the 40-foot-high ceiling was spectacular, we were challenged with giving some intimacy and more human scale to these spaces, while still retaining a strong visibility to the original timber roof deck and truss work. The solution: enormous chandeliers. The design was derived from examples in rail architecture of the era, which achieved all of our objectives, enhancing the ambience while retaining the customers’ focus on the product below.

“ It was just fortuitous for us to get a site this good in the City of Toronto.”

To explore the store and all of its unique attributes, Grocery Business met up with Longo Brothers president, Anthony Longo, for a personal tour.

Walking a store with Longo is a unique experience and he’s justifiably proud of what his team has accomplished in their newest location. He began by explaining that the building is a Toronto historic landmark that once belonged to Canadian Northern Railway. This architectural gem sat vacant in Leaside’s industrial park for many years until developers began transforming the surrounding tract of land into a shopping centre site.

When Longo first laid eyes on the 48,000-sq.ft. former railway shed, he thought, “Geez, how are we going to make this feel comfortable?”

Longos turned to renowned Toronto-based retail design firm Watt International for the solution. “It’s a historic building, so there were some challenges with

respect to using the facility – we had to maintain the windows and brickwork,” says Longo. Even the broad wooden doors that once opened up the locomotive service bays have been incorporated into the design. “I think the designers and our team did a phenomenal job,” he enthuses. “What we’ve been able to accomplish, I think, is a great market feel.” He notes that the store – the 25th for the family-owned business – represents a major milestone. “But we didn’t pick the site to match the milestone. It was just fortuitous for us to get a site this good in the City of Toronto.”

Walking past a sushi hut and hot counter, Longo points out the store’s expanded salad bar and its new veggie bar sections, explaining that it’s about offering customers an easy, prep-free option. Also launched at this store is a fresh-squeezed juice bar, which has since been expanded to six of the retailer’s other locations.

“I’ve sat upstairs [in Corks] and had lunch several times just to watch customer traffic. Longo’s has done something really unique by providing an experience that will continually delight the customer,” says John Scott, president of the Canadian Federation of Independent Grocers. “I think it’s an amazingly well thought-out store.” grocerybusiness.ca

November 2012

25

Besides the breathtaking setting and relentless focus on the customer, a confluence of elements has created a unique shopping experience.

• Aromaté Coffee and Tea counter (with roaster) • Juice Bar • Veggie Bar • Cheese section with cheese master

• Expanded glutenfree section • Corks full-service restaurant featuring local wines and beer • Starbucks • Wine kiosk

Such decisions come from listening to the needs of the customer.

Longo picks up a container filled with fresh-cut strawberries as an example, noting that in addition to offering mixed fruit salads, the store allows customers to mix and match the pre-cut fruits.

The kitchen area, where home meal replacements (HMR) are prepared using the Longo’s $6, $8, and $10 meal programs, has also been extended. “We’ve really expanded the whole offering: gourmet sandwiches, our chicken program – which is very popular – and our oven-baked pizza program,” says Longo. On the other end of the kitchen is the new Aromaté coffee and tea section, where coffee is roasted on the premises and shoppers can choose from up to 40 loose-leaf teas.

To differentiate its specialty items, such as its private-label olive oils and balsamic vinegars or the “Just a Pinch” flavour-infused salts, sleek wooden display cases subtly offset the uniform shelving. Also noteworthy is the expanded gluten-free section. “We’ve seen trends in gluten-free dramatically increase year-over-year,” says Longo. “We recognized that trend in a big way at this store, and plan to expand it in all our other stores.”

At the heart of the market, a Morelli’s Pharmacy breaks up the aisle format. As we pass through the expanded health and beauty section, Longo greets the pharmacist, who is busy organizing products, and explains that Longo’s wanted someone to be on the floor helping customers, rather than sitting behind a service counter.

As we make our way through the store, the culinary adventure just keeps getting better. At the seafood and meat counter, there’s a large cutting board that acts as centre stage for demos. Cheese masters are also on hand to guide customers on what products, from their extensive offering, would best complement the perfect charcuterie platter.

Meanwhile, the bakery is bustling with store associates stacking loaves of bread fresh from the oven or applying delicate icing touches to cakes.

Amongst a myriad of seductive truffles, baked goods, pies and other decadent offerings, this store also has three tiers of cupcakes.

FINISHING TOUCHES »» Refurbished windows »» Re-used original materials and objects found on-site »» Large train doors reclaimed and used to highlight the Aromaté coffee and tea area

»» Period-style lighting was installed: chandeliers and lampposts at checkouts »» Large heritage photos in antique frames were used to marry the history of Longo’s with the building

»» The original brick was cleaned and repointed

»» The elevator shaft was built with a clock tower that’s reminiscent of the building’s original era

»» The 40-ft. ceiling, with exposed original trusses and woodwork, was restored

»» Mechanical systems, such as ducts, were left exposed

“Cupcakes are all the rage right now, and we’ve had a great response [to that offering],” says Longo.

A leisurely stroll down each aisle was more like examining a curator’s personal collection. Each of the Longo’s-brand signature items and unique products has a story to tell. Longo talks about various items with passion and a hint of nostalgia.

This store is certainly the new poster child for the trailblazing retailer, which plans on rolling out similar offerings at its other locations.

For Longo’s, it’s all about creating a family culture and taking cues that will adapt well from other innovative grocers. Indeed, taking Corks – a restaurant concept Longo’s launched at its Maple Leaf Square location in downtown Toronto – to a full-service restaurant and lounge with an outdoor patio, is a new adventure for the retailer. But it’s also an ingenious vehicle for cultivating the Longo’s culture within the community and becoming a destination for casual dining and socializing – a blueprint for the future of the “conventional” supermarket.

FOOD IS Have you tried British Food lately, go ahead it’s GREAT. Visit IFE, London; March 17-20, 2013.

Further information contact Valerie.strand@fco.gov.uk

The Loch Fyne Oyster Bar Argyll, Scotland

ukti.gov.uk

is now part of the

General Mills family of brands!

Contact your new Yoplait representative for more information on Yoplait ® Trademarks of YOPLAIT MARQUES S.N.C. (France) used under license

© 2012 Yoplait Canada

*Trademarks of General Mills. © 2012 General Mills

Taking a

Flyer

MAKING A LIST

Canadians lik e to make their gr ocery shopping lis ts while perusing flyer s, with 60 per cent saying they will use a list the next time they shop.

By Angela Kryhul

Is “love” too strong a word to describe how Canadians feel about their grocery flyers?

Perhaps not, when you consider that 98 per cent of shoppers surveyed by BrandSpark International are using grocery flyers every week.

PRICE CONSCIOUS

The ubiquitous and colourful weekly grocery flyer – whose raison d’être is to drive store traffic ever upwards – is more popular than ever, according to the BrandSpark International 2012 Path to Purchase Study.

Shoppers aren’t quite ready to give up their beloved paper flyers, even though e-flyers are readily available. “Some marketers believe that flyers aren’t effective… but they still seem to be meeting a need,” says BrandSpark president Robert Levy. “I think it’s too early to

Canadians are on the hunt for bargains, and flyers are the tool of choice to help them compare prices and prepare shopping lists. “People read flyers to identify where they’re going to save money, and which product or brand is on sale that week,” says Philip Scrutton, director, consumer insights, BrandSpark. “We know it’s not the only reason, but it’s still the main reason they’re reading flyers.”

pronounce the death of the paper flyer.”

In fact, the humble grocery flyer is helping Canadians keep household spending in check at a time when belt-tightening has become a way of life. The BrandSpark study found 49 per cent of respondents have permanently reduced their spending as a result of the 2008-09 recession, and 79 per cent said they would continue to be very careful with their money, even in an improved economy.

Shoppers browse flyers because they’re looking for lower-priced specials

93%

Like to compare prices between stores

74%

Subscribe to group deal websites (Groupon, Dealfind)

54%

Use flyers to plan shopping trips

53%

Get ideas on what to buy Use flyers to learn about new products

47% 39% Source: BrandSpark International

November 2012

29

No one knows more about the art and science of creating an effective flyer than Michael Marinangeli whose many years of working for a major grocery retailer taught him what works, and what needs work, when it comes to making flyers the powerful selling tool that they can be.

Mike’s Tips for Effective Flyer Design:

Fyler design courtesy Boomerang Art & Design

PLACEMENT Position the week’s most desirable, high-volume and price-sensitive items on the front and back pages.

PAPER • Glossy for a premium store • Newsprint for discount SIZE • Tabloid for conventional stores • Broadsheet for discount retailers • Keep the number of pages to 12 for tabloid and six for broadsheet to avoid reader fatigue

According to BrandSpark, marketers have ample opportunity to influence what people write on their shopping lists, since, seven days prior to a shopping trip, 33 per cent have not yet created a list, and 57 per cent have made only a partial list.

30

November 2012

FLYERS BY DESIGN

Grocery store advertising has come a long way from the full-page black-and-white ads supermarkets once ran in their local newspapers.

These days, the full-colour grocery flyer is king, and almost anything is fair game in the quest to grab shoppers’

attention – from screaming headlines (Best Price Guaranteed! Cheaper! Low Prices!) to come-hither photos of fresh fruits and vegetables, luscious desserts and beautifully roasted meats.

How does a grocery retailer outsmart the competition when

everyone’s competing on price, and heavyweights like Walmart, Metro, Freshco and Superstore promise to match competitors’ advertised prices?

It pays to be savvy about your flyer design, advises Michael Marinangeli, principal at MIDEB Consulting Inc. and a 40-year

veteran of the grocery business.

Flyers must grab attention, create a sense of immediacy and desire, and list important benefits and unique selling points. “Whether it’s Back-toSchool or Halloween, show the customer that you’re in that business,” Marinangeli says.

“The flyer is the grocers’ primary form of communication and marketing to consumers,” notes Marinangeli.

“Why not use it to reinforce your points of difference?”

GRAPHICS • Colourful and striking • Avoid cluttering pages with wall-to-wall graphics and text

SIMPLIFY • Keep copy to a bare minimum • Only a handful of items on each page • Focus on key benefits CHARACTERS • Bold fonts and numbers • Use red ink to convey discounts or urgency • Use black ink on a yellow background for big impact grocerybusiness.ca

November 2012

31

Kevin Smith Dan Bordun

Karen James

•

•

•

kevinsmith@grocerybusiness.ca

danbordun@grocerybusiness.ca

karenjames@grocerybusiness.ca

•

•

•

416 569-5005

416-817-5278

416-561-4744

Check out our website at: grocerybusinessmedia.ca

THE MOBILE CONNECTION

More than a third of the study participants (37 per cent) said they own a smartphone. When asked how they would use their smartphones in relation to grocery shopping, 58 per cent said download coupons; 55 per cent said make shopping lists; and 46 per cent said they would use apps to find out more information about products.

Are Canadians ready to give up their paper flyers and go digital? Not quite yet:

58 per cent of all survey participants said they had looked at a flyer in the hour prior to making their latest in-store purchase.

That’s compared to only 30 per cent who’d watched television, and 22 per cent who’d browsed the Internet.

“We’re big believers that mobile will change and evolve the way people shop,” Levy says, adding it’s all about “what’s going to be more meaningful and convenient to the consumer.”

HOW DO YOU TYPICALLY PLAN YOUR SHOPPING TRIPS? I look at all circulars/flyers in advance and decide where to shop depending on the weekly deals

70%

I have my standard shopping list that I use When it comes to inspiring consumers who are eager to try new products, nothing comes close to flyers. Additional research conducted by BrandSpark in June, 2012, found that 81 per cent of those shoppers derive inspiration from flyers, compared to 25 per cent of those shoppers who look to websites for new ideas.

37%

I get input from household members

30% 26%

I plan out my meals and build my list from there I don’t use a list I make a different list before each trip without consulting flyers or family and without planning out my meals I get input from friends or family outside my household

15% 7% 4%

I decide what I need when I am at the store Other

3% Source: BrandSpark International

It makes sense to keep a stack of the latest flyers at a store entrance since 96 per cent of shoppers will pick up the weekly flyer on-site and browse it as they navigate the aisles, according to BrandSpark.

Why don’t you?

Along with stacking them in a bin, why don’t you also display flyers vertically at strategic spots in the store for maximum take-away.

grocerybusiness.ca

The research also found that, for the average grocery category, only one-third of shoppers know exactly which brands they will buy before entering a store. Shoppers are more likely to browse in-store for snacks, frozen desserts, frozen fruit, frozen vegetables and deli items.

November 2012

33

HOLY CRAP! BUSINESS IS GOOD No salt, sugar or dragons added, HapiFoods’ cereal is a pure, organic success

By Noelle Stapinsky

When Corin and Brian Mullins pitched their Holy Crap cereal on Canada’s hit reality TV show Dragons’ Den – a series that often rockets entrepreneurs into the mainstream or parades their pitches like a gong show – it wasn’t necessarily a deal they needed, but more the five minutes of national exposure.

It also helped that one of the dragons, Jim Stet Treliving, was practically begging to get into business with them while drooling over his bowl of Holy Crap cereal.

The Mullins started HapiFoods Group Inc. in their kitchen, in Sechelt, B.C., about three years ago. Corin was trying to create a healthy survival cereal that would also address her husband’s allergies and sensitivities. More than 20 cereal recipes later, which the couple deems were “god awful,” Corin discovered the winning concoction.

The organic mélange of chia seeds, Canadian grown hulled hemp hearts, buckwheat, cranberries, raisins, apples and cinnamon, is not only extremely healthy, it’s delicious, too.

“The only thing I changed from the original recipe is that I took out the salt and sugar,” says Corin. “As a cook, I always thought you had to have a bit of salt for the chemical reaction. And I thought, gee is there enough sweetness in grocerybusiness.ca

this? I thought taking it out would alter the taste, but it didn’t at all. So when we say it’s salt and sugar free, it’s true.”

With the recipe in the bag, so to speak, and an entrepreneurial program under their belts, they started selling it as HapiFoods cereal at local farmers’ markets. But when a customer exclaimed, “Holy crap, this stuff is good,” the official brand name was born and their sales spiked.

“The first day I sold HapiFoods cereal, I sold about 10 bags,” says Corin. “When we put Holy Crap on the label, I sold 100 bags the first day and never looked back.”

The demand started to build – local grocers and Whole Foods started to carry it, their online business was pulling in about 60 orders per day – and the Mullins were selling up to $60,000 a month at local markets and Vancouver’s Granville Island market.

“But after appearing on the Dragons’ Den in 2010, we had $1.5 million in sales in two days,” says Corin.

Although the Mullins credit social media and their TV appearance for all the hype, it’s the nutritional aspects of their product that’s creating cereal addicts across the country and globally – they have online sales going to more than 20 countries. Holy Crap and its vegan version, Skinny B, are all natural, organic, gluten-free, nut-free, lactose-free, wheat-free, just to name a few, and it has long shelf life.

It’s also very versatile, according to the multiple recipes on HolyCrap.ca.

They may not have penned a deal with any of the dragons, but they did develop a mentor relationship with Treliving. And since the show, they’ve expanded their manufacturing facility in Gibsons, B.C. three times, developed a farming co-operative in Mexico – made up of

Brian and Corin Mullins

20 farming families – for its chia grain supply, and their cereals are now sold in 1,500 grocery stores across the country.

And for this young innovative company, the sky is certainly not the limit. Holy Crap cereal was recently chosen as a menu item for Canadian astronaut Chris Hadfield when he makes his voyage to the International Space Station. “A nine-year-old boy from Abbotsford, B.C., submitted our cereal into the Snacks for Space contest,” says Brian. “Chris Hadfield has already tweeted about it.”

Now setting their sights on expanding into the U.S. market, the Mullins are poised for yet another growth period. When asked what advice they’d give to other start-up Canadian companies, they say that to be a successful small business you have to be Internet literate and able to deliver high volumes almost instantaneously. “Major grocery chains are concerned with margins and planograms… small suppliers have to realize where they fit in.”

Oh and if you can, go on Dragons’ Den.

November 2012

35

THOUGHT LEADERSHIP SERIES

ASPIRING MINDS ON SUSTAINABLE THINKING

K

ruger Products earned Forest Stewardship Council® (FSC®) certification in March 2011, becoming the first Canadian tissue manufacturer to earn

this certification. Today, the company offers one of North America’s largest portfolios of FSC-certified tissue products for in-home and away-from-home use. Michel Manseau is Corporate Vice President, Consumer Sales at Kruger Products and understands the balancing act retailers manage on a daily basis, from offering the products and brands consumers demand at a reasonable price, to incorporating innovative segments and driving trends and important

OPPORTUNITY: let shoppers know you sell green products.

SOLUTION: work with manufacturers to promote green products in your stores. RESULT: loyal green shoppers.

like Kruger Products, and the establishments that sell these products, is a direct way to educate the consumer so we’ll be looking for more ways to integrate this into our awareness efforts over the next few years.

issues, like sustainability.

In May 2012, Francois Dufresne took on the role of

GB: Are consumers really looking for green products?

President of FSC Canada, bringing with him more than 25 years of experience, in-

Michel: According to a recent study commissioned by Kruger Products, almost

cluding his most recent position with Société générale de financement du Québec

90% of Canadian primary grocery shoppers seek out green products. And of this

(SGF), where he played a major role in sustainable development initiatives.

group, more than 85% specifically go to stores they know offer green products.

FSC Canada and Kruger Products have enjoyed a positive relationship since

Credible third-party certification, like FSC, helps retailers provide their shoppers

the company earned its certification last year and have come together here to

with the green alternatives we know they’re looking for. And in the case of

provide insight around FSC for leaders in the Canadian retail industry.

our EnviroCare portfolio, shoppers don’t have to compromise on product quality,

Grocery Business: Why did Kruger Products choose FSC certification for its

performance or pay more while helping protect our trees.

tissue products?

GB: What’s the most effective method to reach consumers with

Michel Manseau: Since the very nature of our business makes us heavily

information about green products?

dependent on trees, we believe it is important to demonstrate our commitment

Michel: Point-of-sale, including packaging, is undoubtedly the most effective

to helping preserve and protect our forests. We specifically chose FSC because it’s

place to reach and educate these shoppers, so retailers and manufacturers have

the most stringent environmental certification system available. It’s also the only

a unique opportunity to work together to integrate consistent education for

certification scheme supported by major NGOs including Greenpeace, the World

consumers at the retail level so they can confidently identify green products.

Wildlife Fund and the Sierra Club of Canada.

We can’t expect consumers to research each certification in depth and understand

Francois Dufresne: We are pleased that Kruger Products not only sees the value

what each means. It’s our job as leaders in the CPG industry to sort through these

in aligning itself with FSC, but that it is passionate about using its leading position

certifications and understand which are credible and communicate that back to

to help protect our environment and promote what FSC stands for – ensuring that

consumers where we know they’re open to receiving new information.

forests are managed in an environmentally appropriate, socially beneficial and

Francois: Consumers have the power to make responsible choices and help pro-

economically viable manner. Kruger Products’ size in the Canadian market and its

tect the environment. In years past, it may have been that to buy green, it meant

well-known brands make this partnership a great opportunity for us to communi-

you were sacrificing on other attributes like quality, performance or price. But

cate through their products about the value and importance of FSC.

with so much recent innovation and dedication, manufacturers are able to offer

GB: Why should FSC matter to retailers?

many green products that perform just as well as their regular counterparts and

Michel: Since we know that most primary household grocery shoppers in

don’t cost consumers more so they can do their part for the environment without

Canada intend to buy green, but few are actually doing so, manufacturers,

actually making any lifestyle changes. In the case of FSC, the logo on pack is a

retailers and third-party organizations need to work together, pool resources

clear indicator that you’re doing something good for the environment – helping

and communicate a simple and consistent messages about truly green products.

preserve Canada’s magnificent forests.

Products bearing the FSC logo – like our EnviroCare line – are a great opportunity for retailers to do this. Shoppers need only look for the FSC logo to know they’re making a good choice for the environment.

Francois: We want Canadians to know that through buying FSC certified products, they’re taking a simple step that directly helps to keep our forests healthy for generations to come. Working with key industry partners with certified products, ®FSC – Forest Stewardship Council, A.C. 1 Rogers Media consumer survey of 550 qualified participants, May 2012. Sustainable Consumption: How do Consumers Identify Sustainable Products and Services? – Multi-method research conducted by My Sustainable Canada concurrently in Guelph, Ontario and Montreal, Quebec in August-December 2012. 3 Padanyi, Dr. Paulette. Helping Canadian Households Achieve Their Sustainability Goals, Kruger Products White Paper; August 2012.

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0

1

2

ADVANTAGE MIRROR REPORT VENDORS VOICE THEIR VIEWS

By Sally Praskey What a difference a year makes! Particularly if you’re a vendor working hard to grow your business within the warp speed pace of Canada’s grocery retail environment.

Collaboration is more important than ever, according to the latest Advantage Mirror Report, an annual survey of packagedgoods suppliers to the grocery/mass/club/convenience/drug channels conducted by Toronto-based Advantage.

As the saying goes, turnabout is fair play; the Mirror Report is the flip side of the Advantage Retailer Report, in which retailers rate the suppliers’ performance (see Grocery Business, September/October 2012, p. 31).

Manufacturers are calling on retailers to work productively with them to build profitable business for both parties, listing that as their first priority (up from second last year), along with “implementing agreed-upon business plans.”

Suppliers are also asking retailers to work with them to forecast and order sufficient stock to maintain displays for promotions, a priority that has skyrocketed to fifth this year from a distant ninth in 2011.

Chalk up the changes to the recognition among suppliers that neither trading partner will succeed in today’s fiercely competitive marketplace unless they work together, a reversal of the adversarial stance that has plagued the retailer-supplier relationship over the past few years. “It comes down to working productively, implementing agreed-upon business plans – it’s all about execution and forecasting,” says Paul Cussons, director of client servicesCanada, Advantage. “Working collaboratively is becoming extremely important in this market.”

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November 2012

Shopper Focused Insights Promo ons via mobile devices

Technology Communica ng brand message differently

Reduce Shipping Lead-Times Personnel Movement Between Retailers

PRICING Investment Levels & Willing To Nego ate

E-Commerce

What’s on the minds of Canadian CPG manufacturers?

It’s clear that the dominant theme for CPG vendors is the entry of new discount players into the market and the impact this will have on relationships between retailers and manufacturers.

New Discount Store To Market

Strategy changes because of Target

Funding Requests From Retailers

Rising Commodity Prices Data Sharing

Centraliza on

Consolida on Of Banners Increased Private Label Offering

Regional Offices At Risk

Control Costs Via Inventory Efficiencies

More Mul cultural Consumers

Healthy Ea ng -

What emerging industry trends do you believe will have the greatest impact on relationships between retailers and manufacturers over the next 12-18 months?

Environmentally-friendly Packaging

November 2012

39

Priorities For Account Support Priority Rank

>

CONTINUED FROM PG.40

Cussons notes that satisfaction is considerably higher among vendors dealing with grocery retailers in Western Canada than in Ontario, an anomaly that he attributes to the frantic pace and highly competitive environment in Central Canada that causes retailers to place greater demands on suppliers. And while Cussons would not speculate as to the reason, satisfaction is also higher for vendors working with accounts in the convenience/gas and mass/club/value channels, compared with grocery.

Both the Advantage Retailer Report and the Mirror Report indicate that, while the retailer-supplier relationship is on the mend, the repair work continues.

Priorities

Importance Rating (1)

2011

2012

2

1

Works productively with us to build profitable business for both parties

84

1

1

Implements agreed upon business plans

84

5

2

Stores execute promotional and retail marketing plans in accordance with commitments

82

6

3

Stores maintain a high standard of on-shelf display

77

9

4

Retailer works with us to forecast and order sufficient stock to maintain displays for the duration of the promotion

76

(1) The importance of each practice is shown on a scale of 100 (critical) to 0 (less/not important).

VENDORS ON COLLABORATION AND COMPETITION

Channel Breakout Net Favourable Scores By Channel 30

26

With strong relationships built on trust, we are more likely to achieve solid year-over-year growth. Also, we can implement new programs or test in-store because the retailer is looking to us to help with differentiation.

23

25

Net Favourable (NF) Score

The benefit of maintaining these relationships is that we have more of a joint business plan versus tactical events.

20

16 15

12 9

Grocery

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November 2012

The definition of relationship has evolved over the past 10 years. Today it’s about the value we bring to retailers and how we can help each other grow our businesses.

West

4 Ontario

5

Atlantic/Quebec

10

Mass/Club/Value

Convenience/Gas

Drug

The move to increased competition should have a positive impact because it will force more dialogue between the parties and vendors will get more value for their spend.

Q&A WITH PAUL CUSSONS, DIRECTOR, CLIENT SERVICES – CANADA, ADVANTAGE Grocery Business: How important is it for manufacturers and retailers to maintain good relationships with one another?

Paul Cussons: It is extremely important. A sales negotiation will start off as fact-based, but eventually it evolves into a relationship.

That happens when the vendor has demonstrated for so long that the facts are accurate, and the retailer has reviewed them so many times that it no longer needs to do so – it simply trusts the data.

GB: If a mutual trust exists, what’s the impact on the sales process?

PC: When both parties trust one another, they are able to execute more effectively. Mutual trust elevates the conversation beyond price, and encourages trading partners to try new things to grow the business.

GB: How does this trust help grow the business?

PC: It moves planning from short term to long term. It allows for information sharing and joint business planning. It also gives the manufacturer a greater opportunity to become a category advisor.

• Taste 80,000 specialty products from 35+ countries and regions.

• Learn through our education programs including The Basics: The Business of Specialty Foods and Today’s Specialty Food Consumer 2012.

• Meet one-on-one with exhibitors in our customized Business Builders 1-to-1 program.

• Discover 100’s new-to-market products in the New Brands on the Shelf Pavilion.

GB: How has the industry changed in terms of vendor-retailer relationships?

PC: One of the comments that came out of the report was that everyone now has data, so knowing whom to trust and building that relationship between supplier and retailer is becoming more important than ever. People are saying: we’re all doing the same thing with data, so we have to go back to the days when you trusted the person you were talking to.

Founded in Canada in 1988, Advantage™ operates in more than 30 countries. Its jointly sponsored programs provide an ongoing industry benchmark for retailers and manufacturers to measure and track their relationships with key business partners.

For more information or to participate, contact Paul Cussons at 416-863-0685, ext. 170; pcussons@advantagegroup.com.

Learn more and register today at fancyfoodshows.com (Please enter priority code WAD7)

farm credit

LEADERS

ON LEADERSHIP

For Jamie Moody,

Hometown

Georgetown, Ont.

president of Tree of Life Canada, leadership is about people and values

Educated

Graduated from Western University and the Richard Ivey School of Business and went on to earn a CA.

Activities

Serves on the Board of Governors of Food & Consumer Products of Canada, on the board of the Toronto Food Business Incubator and was a founding member of the CEO Global Network.

Career Path

Began his career in food manufacturing, joining Tree of Life in 1998, moving through the roles of CFO and vice-president of marketing.

How do you define leadership?

Whose leadership style do you admire?

That’s a tough one… so let me comment on what I see as the role of a leader, and that is entirely about fielding the best team in every aspect of the business. The attraction, retention and most importantly the development and engagement of people is job one for any leader. With the right team, strategic and tactical execution follows.

My personal approach is that of servant leadership – being open, approachable and genuinely interested in the health and well-being of our team. Every leader bears the responsibility of creating a strategy that leads to success; after all, a bad strategy with good execution just leads to failure faster.

Herb Kelleher of Southwest Airlines always jumps to mind, especially as you consider the engaged and empowered culture of accountability that he fostered.

For lessons on strategy and competitive differentiation, I think of what Jack Welch did at General Electric.

grocerybusiness.ca

Can you share a defining leadership moment in your career?

As a leading distributor of specialty and natural foods in Canada, Tree of Life is always challenged to represent brands and categories that are relevant to our customer base and to our culture of success. Some years ago we set out to define the values

that our company and people embrace and the core purpose of our business. In other words, we took responsibility for the culture of our organization. Now I regularly hear people discussing a business issue in the context of these values. And the values always win!

Did you have a coach or mentor who had a strong influence on your career?

I’ve had many mentors who’ve encouraged me and who I’ve learned from. There are too many to mention in this space, but I will highlight two.

Shortly after being promoted to president in 2005, I joined CEO Global Network, a learning organization for CEOs. John Wilson, the founder of the Network, has been my personal and business mentor ever since.

The information and confidence gained by being part of such an organization has been transforming.

Early in my career, a friend’s father, Harry Keire, shared words of wisdom: “Don’t be in such a hurry and make sure that you learn as much as possible from every situation.” That advice hit home.

What are you reading now?

I have reading glasses and business books all over the house. I usually have several books on the go. My most dog-eared include Patrick Lencioni’s business fables, especially The Five Dysfunctions of a Team and The Five Temptations of a CEO. Also, Good to Great and How the Mighty Fall

by Jim Collins. I am currently juggling Winning by Jack Welch and Verne Harnish’s latest book, The Greatest Business Decisions of all Time.

Tree of Life Canada is one of the largest distributors of speciality and natural foods in Canada.

November 2012

43

POINT OF PURCHASE SUCCESS is all relative!

By Catherine Yuile

W

e’ve all heard the statistic that 76 per cent of consumer purchase decisions are made in-store and when point-of-purchase (POP) communications are incorporated into a brand’s marketing campaign, they can help convert purchase intention into sale. In fact, POP is among the top channels for creating brand impact, ranking even higher than other paid media such as TV and print.

Despite this, the Point of Purchase Advertising Institute (POPAI) reported that of every 150 in-store displays, fewer than half of shoppers notice even one of them.

Ipsos ASI’s experience suggests that, overall, in-store advertising is being retained at a rate much lower than that of television advertising.

And within the retail environment, supermarkets seem to fare

the worst, with Canadian shoppers indicating they are significantly less likely to notice or remember grocery store marketing materials versus those of superstores or drugstores.

Despite having access to some of the best retail offerings available, Canadians said they don’t enjoy shopping for groceries. When compared with other regions around the world, only one in three agrees that grocery shopping is “an enjoyable part of my life.”

Perhaps because Canadians don’t really enjoy grocery shopping they are more impulsive, taking less time to prepare and shop with a list. Or possibly, they are more brand-loyal, and therefore intuitively know which brands they will buy.

Either way, it’s a double whammy for new products trying to break through the category on-shelf.

Three strategies that let POP tell the brand story

A

For emotionally driven categories such as chocolate, a consistent strategy across all consumer communication. Visually depicting the product’s taste/pleasure/ immediate gratification can be very powerful in connecting with shoppers.

B

For low-involvement categories, getting shoppers to break their buying habit should be the goal of a brand that is not currently the market leader. Messages relating to superiority of performance are important, as are promotions, coupons, and samples to incent trial.

Not surprisingly, POP materials have more at-shelf impact when they are consistent with a brand’s campaign across other channels, triggering the same consumer needs, values, and emotions in each. And communications that bridge the gap by linking product benefits to usage occasions will have a stronger chance of closing the sale and driving incremental purchases – relevant differentiation at work!

44

November 2012

C

A market-leading brand may want to reinforce its strengths to gain share of repeat purchasers. Ipsos research finds that for consistent growth, it is more important that in-store communications express a compelling value proposition rather than simply stating a discount.

Average Consumer Recall By Medium % Recall Store distribution Package/Look Product Performance POSale Television Flyer PR News/Earned WoM Sponsorship In-Store Display Radio Promotion Billboard Newspaper Source: Ipsos Global Advisor

Transit Website Direct Mail Posters

STATEMENT:

Digital Ads Sample Magazine Coupon Email Cinema Source: Ipsos ASI Brand* Graph Database, N.A.

0

10

20

30

40

50

60

Grocery shopping is an enjoyable part of my life

With 30,000-50,000 SKUs in an average grocery store, shoppers are often overwhelmed by choice and are likely to tune out to save time. This usually means they default either to the brand they are most familiar with or to the first one they see.

That’s where relevant differentiation comes in – communicating a message that is personally meaningful and emotionally resonant to consumers, while saying something new or different from other brands in the category. All this suggests that the solution calls for retail-specific strategies to ensure that POP communications will both stop the shopper and close the sale.

Product packaging and shelf/display communications need to draw the shopper’s eye. Using bright colours, contrasting and other creative techniques, the POP material will stand out. Location, height and space, as well as understanding how consumers shop your category, are key to designing the appropriate breakthrough approach.

CATHERINE YUILE is a senior vice-president with Ipsos ASI, leading the client service team overseeing pre-testing and in-market tracking. Catherine is Ipsos ASI’s global expert on ad transferability across borders.

grocerybusiness.ca

November 2012

45

LIST IT

New products you need to know about

It’s all Greek to me!

Astro Original Greek Fat Free yogourt is made by concentrating the milk three times to deliver the high protein of traditional Greek yogourt. Thick and creamy, Astro Original Greek Fat Free yogourt is made with all natural ingredients, contains no preservatives, is an excellent source of calcium and is gelatin free and kosher. astro.ca

Lean Cuisine Fresh Inspirations Lean Cuisine Fresh Inspirations is a premium innovation that boasts a unique simmer and steam design that cooks each ingredient the way it was meant to be cooked. With six flavours and impactful visibility on shelf, Lean Cuisine Fresh Innovations drives incremental dollars to the category. leancuisine.ca

46

November 2012

Grab ’n go with kik!

Raincoast Crisps go gluten-free

Astro kik is a new drinkable yogourt that gives teens a kik to do their thing! Sports, school, socializing or just a snack on the go at any time of the day. Astro kik is available in a convenient grab ’n go 200 ml bottle with a resealable cap. astrokik.ca

Lesley Stowe launches her newest creation, wheat-free Raincoast Oat Crisps, created for health-conscious consumers and those with gluten sensitivities. These delicious crackers will initially be available in two sweet and savoury flavours, Original and Rosemary Raisin. lesleystowe.com

Qi’a - Superfood Energy for life

Qi’a, (pronounced “key–ah”) meaning energy, combines nutrient-rich, superfood ingredients chia, hemp and buckwheat to provide an excellent source of ALA Omega3s and a good source of fibre. Qi’a is also loaded with Omega-6s, amino acids, protein and essential vitamins and minerals. It has no added sugar or salt and is organic, vegan, gluten-free and Non-GMO Project Verified. naturespath.com

Simply Dressed... simply delicious Grow your produce category by providing simple, back-to-basics dressings. Designed with only the essential ingredients for pure, fresh flavour. Crafted with extra-virgin olive oil, sea salt and canola oil (a source of omega-3). marzetti.com

grocerybusiness.ca

November 2012

47

Grocery Innovations Canada 2012

The Canadian Independent Grocer of the Year Award Winners

MASTER MERCHANDISER

Bravo!

PLATINUM AND GOLD LARGE

GOLD LARGE

GOLD MEDIUM

Stephen Kouri, Smucker Foods, John Briuolo, Ken Schley, Noel Hayward, Quality Foods, Northridge, B.C.

GOLD SMALL

Stephen Kouri, Smucker Foods, Aaron Coutts, Doug Lovsin, Freson Market IGA, Barrhead, Alta.

Quality Foods, Northridge, Nanaimo, B.C.: Noel Hayward, Ken Schley, John Briuolo, Stephen Kouri, Smucker Foods Buy-Low Foods, Walnut Grove, Langley, B.C.: Dan Bregg, Stephen Kouri, Smucker Foods, Albert Lum

GOLD AWARDS

SPECIALTY GOLD

MEDIUM GOLD

SMALL GOLD

Michel Manseau, Kruger Inc., Daniel Plouffe, Patrick Plouffe, Métro Plouffe de Sherbrooke, Que.

Steve Fox, Nestlé, Dan Bregg, Albert Lum, Nester’s Market & Pharmacy, Whistler, B.C.

48

November 2012

Robbie Lockhart, Steven Lockhart, Mark Vickars, Choices Market Kelowna, B.C., Blair Ruelens, PepsiCo

Grocery Innovations Canada 2012

October 1 & 2, 2012 SILVER AWARDS

SPECIALTY SILVER

LARGE SILVER

MEDIUM SILVER

Longo Brothers, Bathurst St., Vaughan, Ont.: Mark Salemi and staff

Michel Manseau, Kruger Inc., Linda and Brooke Kynoch, Safety Mart Foods, Chase, B.C.

BRONZE AWARDS

John Visconti, The Market By Longo’s King St. W., Toronto, Blair Ruelens, PepsiCo

SPECIALTY BRONZE

LARGE BRONZE

SMALL BRONZE

Freson Bros. Brooks IGA, Brooks, Alta., staff with Doug Lovsin

Steve Fox, Nestlé, Judy Bennett, Brian O’Neill, Colemans Food Centre, Mount Pearl, N.L.

grocerybusiness.ca

Sunripe, London, Ont: Will and Ingrid Willemsen and family, Blair Ruelens, PepsiCo

November 2012

49

50

November 2012

Grocery Innovations Canada 2012

The Arnold Rands Heritage Award Winner

Bravo!

Masstown Market, Masstown, N.S.: Lisa and Laurie Jennings, Scott Lindsay, The Coca-Cola Company

Canadian Independent Grocer of the Year Hall of Fame

Doug McGillivray, General Mills; Dana Lougheed accepting for Harold’s Family Foods, Prince Albert, Sask.

Doug McGillivray, General Mills and the Willemsen family Sunripe, Sarnia, Ont.

Nester’s Market & Pharmacy, Whistler: Dan Bregg and Albert Lum; Doug McGillivray

Canadian Federation of Independent Grocers Life Member Designation

Bill Dunne, Acosta, Brent Battistelli, and Peter Singer, Life Member

Ben Wilson, Glen Wilson, Life Member, Brent Battistelli, Dallas (Wilson) Gabriel

David Stezenko, Brent Battistelli, Yuri Stezenko, Life Member, Dan Stezenko

Ernie Skinner and family with Brent Battistelli

Grocery Innovations Canada 2012

on the

tradeshow floor October 1 & 2, 2012

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November 2012

Grocery Innovations Canada 2012

grocerybusiness.ca

November 2012

53

UGI 40th Anniversary

Denis Gendron, the president of United Grocers Inc. and his staff welcomed more than 300 guests to their 40th Anniversary celebration.

UGI’S 40TH ANNIVERSARY CELEBRATION

TORONTO, OCTOBER 25TH 54

November 2012

UGI 40th Anniversary

With live music and a lively crowd, the celebration was an evening to remember.

grocerybusiness.ca

November 2012

55

it figures >

67%

The

Conscious Consumer What Canadian consumers are looking for

67% of Canadians say they look for Canadian food products to buy in-store Takeaway The “buy local” message has hit home. A strong sense of

national pride translates into Canadians seeking out homegrown produce and foods. Manufacturers and retailers can capitalize on this favouritism by highlighting and drawing attention to their locallyproduced foods.

64% 26%

of Canadians say they like to try out new foods and ingredients

of Canadians say people often ask for their opinion about new foods

Takeaway These consumers consider themselves tastemakers or food-

ies. Retailers can appeal to these consumers by highlighting the new and unique offerings in your store. Manufacturers can draw attention to new, trendy ingredients through their marketing and through packaging.

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November 2012

56%

of Canadians say they like to eat foods from different countries and cultures Takeaway The Canadian palette is evolving as we

are increasingly being exposed to foods from other cultures and countries. Ethnic is the new mainstream.

Appeal to these adventurous consumers’ need for variety through a wider array of ingredients and products from different cultures.

71%

54%

of consumers make their shopping list based on items featured in the store flyer

71% of Canadian consumers say they read package labels to be sure to get the foods with qualities they want Takeaway Canadians are label conscious. Manufacturers

and retailers should design labels with more than just branding and nutritional considerations. Understand what qualities consumers are looking for and make sure your packaging communicates that quality. Sell the benefits of your product in a clear way – your label is your best billboard.

QUALITY GUARANTEE

63% of Canadians say it is

Takeaway With 62 per cent of consumers reading

each page (up from 54 per cent in the last three years), it’s no longer about just the cover. Be creative and use the inside pages of the flyer to reach the majority of consumers.

difficult for them to know if an imported food is safe

Takeaway Canadians are increasingly

conscious of food safety. Manufacturers and retailers should assuage consumer fear by reassuring them of the safety of the food they’re purchasing.

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

grocerybusiness.ca

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

November 2012

57

Perry’s Point of View

FOOD INFLATION AND

THE GREY CUP If you are in a pub and tired of arguing about the Als and the Eskies, just bring up food inflation. To most consumers, food inflation is rising meat prices and smaller chip bags, all part of a vast agro-industrial conspiracy to ruin their Grey Cup party. To investors, inflation is a chance for food companies to run a few more sales dollars across fixed costs and generate some easy earnings. But to grocers, inflation is a confluence of events requiring careful management of the gap been rising food costs and often stagnant food prices.

Food price inflation is not always good for grocers, and deflation is not always bad. In Canada, we went through an 18-month period where food prices deflated, yet gross margin dollars increased significantly. This is because food costs deflated faster than food prices, specifically because of a quickly rising Canadian dollar which lowered the costs of all those items manufactured or grown down in the land of quirky four-down football.

Food costs are impacted by numerous factors, only one of which is the actual cost of food. Corn or wheat prices spiraling upward don’t mean that invoiced food costs will rise in proportion. In the majority of products, there are far more costs due to packaging or marketing than due to actual food ingredients. On top of that, manufacturers often have hedges in place to smooth commodity

58

November 2012

impacts; and in many cases the rising or falling Canadian dollar can have a bigger impact on cost of goods than almost any other single factor. This is because many products are manufactured south of the border, and most ingredients are purchased there.

Certainly, in products that have minimal or no processing such as meat, produce or bakery, there is a more direct relationship between commodity fluctuations and invoice costs, often protected only by the Canadian dollar. But in those categories, consumers are savvy enough to switch among proteins and fruits, or trade down to the belly-fillers in the bread aisle, usually keeping volumes steady and Grey Cup parties wellstocked.

If it was simply a matter of taking cost increases to the retail price, then managing inflation would be as easy as kicking a rouge.

But prices are set by the market, not by the costs. And the biggest single impact on the market is the acceleration of square footage growth in your town or region or province. If square footage is coming in, then productivity drops, and sooner or later someone is going to drop prices no matter what direction costs are going.

Most forecasters see rising commodity costs and are betting on inflation over the next three years, but we say take deflation and the points.

The biggest single impact on the market is the acceleration of square footage growth in your town or region or province The Canadian food industry is heading into a big burst of square footage growth which will likely hold prices back. A strong year-over-year Canadian dollar (likely coming into the end of 2012) can provide excellent pass protection for gross margins, but that’s a defence that won’t last more than a couple of quarters. Then again, we’re also picking the Argos.

Perry Caicco is managing director at CIBC World Markets. He has worked for 15 years in the supermarket, general merchandise and packaged goods industries with Loblaw Companies Ltd. and Coca-Cola. Perry is a founding Grocery Business Advisory Board member.

Train, network and find inspiration at the most comprehensive restaurant and hospitality Show in the industry, featuring a dedicated floor and education track focused on beverage alcohol. You may just find that new product or flavor pairing that sends check averages soaring. But only if you’re here.

For more information visit Restaurant.org/Show or WineSpiritsBeer.org

3

18-21 MAY, 2013 MCCORMICK PLACE CHICAGO, ILLINOIS

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