January/February 2013 by Grocery Business

January | February 2013 Vol 3 | No 1 $9.95

Metro Inc.’s

Johanne Choinière Leads by example

more inside on:

PM # 42211029

The Industry’s Most Influential Women

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2012 This is the year

that was

January | February 2013

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January | February 2013

Grocery Business January | February 2013 Volume 3, Issue 1

contents Departments

2012 - This was the year that was

Front End

People moves and more…

11 Open Mike

The power of private label

15 Shelf Life: Candy Counter

70 Launch It, List It

New products you need to know about

72 It Figures

Shopping for value

74 Perry’s Point of View

Rents, REITS and Risks

Create an experience and add drama to the candy aisle

52 6

January | February 2013

on the cover

30 ”If you want to succeed in the business, you have no choice Johanne Choinière: Leadership by Example

but to deliver on your customers’ highest expectations.”

45 features 16 What Women Want

63 Natural Selections

Canada’s shoppers are among the worlds’ most impulsive

27 Grocery Game Changers

Technology is changing everything

36 Profiles in Leadership

The industry’s most influential women

Organika shares its passion for health

65 2012 Top 10 Most

Innovative Products

66 Regional Appetites

NDP Group’s latest Eating Patterns in Canada report

45 Category Report: Coffee Buzz

68 Golden Pencil Awards

49 The ‘X’ factor

The single-serve coffee nation is growing

The grocery industry gathered in honour of Les Mann and Paul and Michael Higgins

More women in leadership roles = A better ROI

52 CO-OP Atlantic

85 years and counting

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72 January | February 2013

Front End

LCBO plans to “Express” itself in Ontario grocery stores Much to the surprise of many in the Ontario grocery industry, on the last day of 2012 the provincial government announced a pilot project to open “Express” Liquor Control Board of Ontario (LCBO) outlets in 10 grocery stores. Immediately following the announcement by Finance Minister Dwight Duncan, the Canadian Federation of Independent Grocers (CFIG) met with Duncan and other government officials. CFIG voiced its concerns regarding how the test stores were to be chosen and a request was made that the government consult with the industry prior to rolling out the pilot. “We’re not opposing it. Our biggest concern, frankly, is if they’re going to roll this kind of project out, that everyone gets equal access to it,” said John Scott, CFIG’s president and CEO. “If our members want to participate in this, they should have the opportunity to do so. We want a level playing field and the government has assured us that they will work with us on this.” According to Scott, not all independent stores have the space to accommodate an outlet, and for those that do want to participate there could be a capital cost burden for the retailer. The proposed projects will require stores to supply 2,500-square-feet for the outlets, which will be run by LCBO employees. The province says it intends to roll out the “Express” format outlets over the next eight to 10 months, although a possible spring provincial election could impact these plans significantly.

PARMALAT CANADA Cheryl Smith, Parmalat Canada’s newly appointed executive vicepresident of sales and marketing for cheese, tablespreads and cultured, has also been named one of Canada’s Most Powerful Women by the Women’s Executive Network. Roger McVety was recently named national vice-president, sales and marketing for fluid and distributors. Parmalat is one of Canada’s largest food companies with over $2.2 billion in annual revenue, a workforce of 3,000 people and 17 dairy processing facilities.

Grocery People Karen Brux has been appointed to lead the Chilean Fresh Fruit Association’s promotional efforts in the U.S. and Canada. As managing director for North America, Brux will oversee all promotional and support programs for Chile’s fresh fruit growers, packers and shippers. Timothy Brown was recently named president and CEO of Nestlé Waters North America. Brown was formerly president and CEO of Nestlé Canada.

January | February 2013

Shelley Martin has been appointed to the position of president and CEO of Nestlé Canada. Martin has a strong track record and multi-business and category leadership experience. She joined Nestlé Canada in 1990 and has managed the coffee/beverage, pet care and confectionery businesses. Tom Smith is the new executive director of Fairtrade Canada. As the former vice-president of Co-op Atlantic’s food division, Smith developed relationships with fruit

and vegetable producers in Central America and worked to create programs across Atlantic Canada. Michael Hsu recently joined Kimberly-Clark as president of North America consumer products. Hsu was most recently in a senior role with Kraft Foods in the U.S. and spent six years in executive positions at H.J. Heinz Company. At Kimberly-Clark, Hsu succeeds Robert Abernathy, who has announced his intent to retire after more than 30 years with the company.

Front End

We’ve Got Mail Hi Karen and Kevin, I just read your publishers’ message regarding the irradiation of meat. Frankly, I strongly disagree. My belief is that a food system that requires radiation to provide a safe product is a broken one. A single facility processing 4,500 head of cattle per day is just a small part of the problem. From my experience, I also believe the CFIA’s consistent and ongoing inability to enforce is another grave concern. If our store is any indication of consumer trends, people are more and more willing to purchase local meat from smaller suppliers and they are willing to pay a very hefty premium for it – often more than double. Best regards, Joe Karthein Operations Manager Kootenay Co-op, Nelson, B.C.

James Macintosh is the new general manager of Energizer Canada. Macintosh joined the organization in 2003. His most recent role was as general manager of Energizer, Personal Care.

health-care work. The company saw its 2012 third-quarter earnings rise 21 per cent with the $49 million sale of some of its Genuardi’s stores. As Burd transitions out of his role he will assist Safeway in finding a successor.

Safeway Inc. announced that its long-time chairman and CEO, Steve Burd, will retire in May. Joining Safeway 20 years ago, and being named CEO shortly after, Burd leaves his role to enjoy more personal time and to pursue his interest in

After over 30 years with Nielsen – including several international postings – John Mee retired as the senior vice-president of Retail Services in December. Mike Ljubicic assumes leadership of the Canadian Retail Services team.

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In Memorium: Lembit Janes Sr., Founder, Janes Family Foods An icon in the Canadian food industry and in his 90th year, Lembit Janes Sr. passed away recently in Toronto, Ont. Janes arrived in Canada with his wife Mary and young son Lembit Jr., from Estonia in 1948. After several years working in the seafood industry, Janes founded Grimms Foods in 1969 in Concord, Ont. The business grew to become the respected Janes Family Foods with four facilities around the Greater Toronto Area.

Acosta Canada has named Shaun McKenna as president. McKenna leads the newly combined Acosta and Mosaic sales and merchandising business unit. For the past year, McKenna has led Mosaic’s sales and merchandising business in Canada, after leading the integration of Mosaic and CIM. McKenna joined Mosaic from CIM where he led the sales management division. He began his career at the Coca-Cola Bottling Company where he held various positions of increased responsibility in sales and distribution management. McKenna replaces Bill Dunne who recently announced his departure after 10 successful years with Acosta. January | February 2013

The New BrandSpark Canadian Shopper Study Shopping habits revealed in one of Canada’s largest consumer studies January | February 2013 Volume 3, Number 1

60%

believe environmental claims are exaggerated or misleading

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50%

Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca

regularly purchase store brand food

Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca

67%

will pay more for a new product

Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca

80%

use hand written shopping lists

Managing and Online Editor Noelle Stapinsky

90%

read flyers regularly Consumer Insight brought to you by:

Source: BrandSpark Canadian Shopper Study, December, 2012

Contributing Editors Sally Praskey, Angela Kryhul, Gabriella Nobrega Creative Agency Boomerang Art & Design Inc. boomart.net Cover Photo Matthew Plexman

Canada’s leading fresh fruit & vegetable industry event

FRESH SUCCESS

Subscription changes & updates or general inquiries: info@grocerybusiness.ca

Grocery Business Advisory Council Phil Donne, Campbell Company of Canada

John Scott, Canadian Federation of Independent Grocers

ANNUAL

Perry Caicco, CIBC World Markets Nancy Croitoru, Food and Consumer Products of Canada Bill Dunne Tim Berman, Kraft Canada Inc. Mark Ayer, Procter & Gamble Inc.

April 17-19, 2013

David Wilkes, Retail Council of Canada

DIRECT ENERGY CENTRE TORONTO (ON) CANADA

Michael Marinangeli, MIDEB Consulting Inc.

Cori Bonina, Stong’s Market

© 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

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January | February 2013

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Grocery Business Media 390 Queen’s Quay W., RPO Box 4085 Toronto, ON M5V 0A4

Open Mike

The Power

of Private Label By Michael Marinangeli

Back in the 1980s and early ’90s, there was only one competitor whom I truly feared, and it wasn’t a banner. It was someone who ran a private-label department who kept me awake at night. That person was Dave Nichol, who launched President’s Choice at Loblaw in the mid-’80s.

Nichol is a marketing genius. He is a lover of food. He is the ultimate salesman. He revolutionized the way we develop, source and market private brands, even to this day. Over the past 20 years, most retailers have developed their own versions of Dave’s premium and mid-tier private-label program. We have come a long way from the days of slapping a label on a product and selling it at a lower price and at higher margins than the national brands. In the 1980s, with the launch of President’s Choice products, we saw private label split

into two tiers. Most retailers already had a mainstream private-label program, but no one else offered a premium line of unique and high-quality products that provided a credible alternative to the leading national brands. The launch of President’s Choice afforded Loblaw a sustainable competitive advantage that left everyone scrambling to catch up. This experience taught us the importance of understanding the role private-label brands play in each category. Incorporating this thinking is critical when developing strategies and tactics across the entire category management planning process. There are many ways in which private-label brands help boost sales; I have narrowed them down to five. Price Image: Great products at a lower price are the cornerstone of every private-label program. During weeks when there is little or no activity on national brands in a particular

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category, your private-label product can provide a value option for the consumer. Lower acquisition costs and superior product sourcing can create a competitive advantage. Simply put, better buying allows you to sell at lower prices, with higher margins than your competitors. Profit: In most cases, private label delivers a better penny profit than national brands. If it doesn’t, challenge your procurement department to reduce costs or review the product specs or viability. Increasing your private-label penetration in all categories across the store will lead to higher overall profitability when this strategy is combined with a solid nationalbrand option for the consumer; there needs to be a healthy balance between the two. Promotion: Retailers control the cards when it comes to promotion. During holiday periods, most retailers have an array of unique and

January | February 2013

Open Mike

We learned that the successful launch of Our Compliments was as much about motivating and inspiring the retailers as it was about the outstanding products themselves interesting products that differentiate them from their competitors. Grocers can achieve outstanding results because they control the product, price, shelves, displays, margins, quantities and ads. National brands need to work harder to compete and gain/ maintain share of promotional activity in your stores. Protection: We are in a high/low pricing environment today. Front-page lead items are sold at rock-bottom prices with little or no correlation to acquisition costs. Private-label products provide an element of protection by shielding margins against the losses wrought by deeply discounted features. Displaying and promoting your private brand at a lower price and higher margin than the loss leader can deflect some sales towards the more profitable alternative. Cross-merchandising – tying in and displaying related private-label items with the loss leader– also balances the mix. Passion: I had the unique opportunity of being on the launch team for the Our Compliments private-label line when I worked at Oshawa Foods in the 1990s. It was here that I learned the importance of being passionate about the brand, and doing whatever it takes to make it successful. More than 1,000 retailers, head-office staff and participating grocerybusiness.ca

suppliers attended the unveiling. The Our Compliments name had been kept secret until then. Everyone was hyped. Everyone was committed, and couldn’t wait to sell the products. We launched in our stores two weeks later, and the sales number was off the scale. The retail execution was flawless, and the enthusiasm was maintained into successive waves of product introductions. Having a passion for the brand moves you well beyond slapping a label on a product and putting it on the shelf; it ignites all the stakeholders to excel. We learned that the successful launch of Our Compliments was as much about motivating and inspiring the retailers as it was about the outstanding products themselves. Recently, I read an article on private label from a respected category management expert in the U.S. He said: “Private label should be viewed as a low-cost alternative to branded items and never as a business building solution.” I don’t think this guy ever heard of, or read about, Dave Nichol. Canada should be very proud of our leadership in private brands.

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

January | February 2013

NEW IMPROVED! Resealable Packaging

Introducing

New Resealable Packages! Featured in

National TV Advertising Starting January 2013 Consumers Love Them ! “I love the new packaging … much more convenient !” ~ Jackie R.

“Fantastic improvement to a fantastic product !” ~ Marc G.

“Love it … now they don’t fall out all over my purse !” ~ Mars F.

“Eureka … thank you so much !” ~ Pauline M.

Canada’s Best Selling Throat Lozenges* Distributed by TFB & Associates Limited, Markham, ON L3R 9Z6 ® Registered trademark of Loft house of Fleetwood Ltd. * AC Nielsen Th roat Lozenge market 52 weeks to April 7, 2012

Shelf Life

Candy Counter By Noelle Stapinsky

At the grocery store, consumers are focused on value more than ever before. But when it comes to confectionery, they are brand diehards and won’t compromise on their sweet treats. “Today’s savvier consumer wants higher quality and lower cost especially in the candy category. There are so many SKUs to choose from, it’s a very competitive environment,” says Jenn Ellek, director of trade marketing and communication for the National Confectioners Association in the U.S. “Retailers need to work really hard in-store to capture and retain their shoppers. With the fun candy category, they should create an experience and a drama around the category.” With such a variety of innovative products and rapidly growing SKUs, one of the biggest Achilles Heels for many grocers is with offering variety and selection. Many consumers typically go to the drugstore to feed their sweet tooth because it has historically carried more candy SKUs than grocers. Ellek says, “An interesting thing retailers should pay attention to is the growth in confectionery. As a category, it has outpaced overall store growth.” And while Ellek agrees that health and wellness is a trend across all categories, she says, “at the end of the day, it’s the philosophy that when you go into the candy aisle, you want to buy that candy you know and love. It’s a small treat to be enjoyed, a little pleasure.”

The Big Chew The gum segment, which is broken out separately from chewy candy, is in a league of its own. The biggest gum chewers in Canada are adults aged 35 to 44, according to the NPD SnackTrack service. And children under 18 and adults 55+ account for 17 per cent of gum consumption. “What’s different is why consumers of different age groups choose gum,” says Joel Gregoire, NPD Group Canada. “For instance, children are more likely to chew gum for the simple enjoyment of the product, whereas oral health (or fresh breath) is more important to adults.”

Sweet Tooth The number of times Canadians enjoyed these treats in 2011 Source: NPD SnackTrack

174

Something To Chew On Gum

+1.6% Chewy Candy Sugar-free Gum Licorice Hard Candy Consumption Growth 2011 vs 2010 grocerybusiness.ca

Chewy Candy

Hard Candy

Sweet Insights +4.2% +4.4% +4.4%

While major seasonal occasions such as Halloween, Christmas and Easter drive major traffic down the candy aisle, the selling season often happens for as much as 10 weeks before the actual holiday. This is a perfect opportunity for retailers to create seasonal sets and displays to promote sales. Of course, for grocers to remain competitive in this candy land, more SKUs for variety and selection are needed. This is often a struggle for many grocers as aisle space is tight. “Retailers need to show the consumer that if they walk down the candy aisle, they’re going to find innovation,” says Ellek. January | February 2013

What Women Want By Catherine Yuile

Picture Canada’s primary grocery shopper: impulsive, time-pressed, a fan of “one-stop shopping” and, more often than not, a woman. Today, Canada’s primary grocery shopper struggles to juggle kids, a career and broader family responsibilities. Being the household’s primary grocery shopper is demanding and, as our research has shown, it’s not a responsibility that many women enjoy, although they appreciate the importance and value it brings to their family.

As this research shows, Canadian women are prime prospects for effective point-of-sale strategies. Retailers and consumer packaged goods companies that are able to effectively address the challenges that today’s women face, can maximize the opportunity with their female shoppers.

Canadian women, particularly those who are 35-plus, are more likely to find the shopping experience stressful and exhausting. They dislike the expense and view it as yet another chore on their weekly to-do list.

So what strategies can retailers employ to help these time-stressed shoppers? • Because women are twice as likely as men to indicate that a friendly and helpful staff impact their store selection, create an environment and shopping experience that helps women feel they are making the most of their time and money investment. • Cleanliness and freshness (particularly important for those 35-54) are key. • Present a well-organized, conveniently located store with a broad product selection to facilitate one-stop shopping.

Given these factors, our research has shown that time-pressed Canadian women are more impulsive shoppers than their male counterparts and less thorough when grocery shopping, particularly when compared to other regions in the world.

Keep in mind that women place more value on almost every element of in-store communications.

1 Highlight compelling promotions

January | February 2013

2 Be sure that the message is clear and easy to digest

3 Use bright colours and unique visuals

4 Be well-placed, leveraging key branding and messaging campaign elements

Only 16% of Canadian women strongly agree that they enjoy grocery shopping

How do Canadian shoppers compare? I always buy something that I had not planned to

% who strongly or somewhat agree

Middle East / Africa

59 55

Canada 49

U.S.

Europe

Latin America Asia/Pacific

39 Source: Ipsos Global Advisor 2012

In-store communications through effective displays and packaging are key to a successful execution. Consider Procter & Gamble Olympic in-store activation for the “Thank you

Canadian women who do enjoy shopping feel pride in taking care of their family. It gives a sense of accomplishment, I work hard therefore am able to take good care of and provide for my family

I enjoy looking for new items and seeing what is available

I can take care of my family members with pride. Buying thoughtful and nutritious food for my family is an enjoyable activity

Mom” campaign that focused on thanking the moms of athletes and honouring moms all over the world. P&G created specialized in-store displays and packaging activating their biggest corporate global campaign platform ever. Marc Pritchard, P&G’s global marketing and brand building officer, said that retailers who activated the campaign with in-store displays saw a five-to-20

“The odds of going to the store for a loaf of bread and coming out with only a loaf of bread are three billion to one.” erma bombeck, author

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per cent sales lift for P&G products during the three-to-four week Olympic merchandising period. (Source: Advertising Age)

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.

January | February 2013

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

STRATEGIC LEADERSHIP COFFEE

BREWING UP BEVERAGE SALES The coffee category is hotter than ever, with sales of roast and ground coffee up a whopping 17% over the previous year. The second-most-consumed beverage after tap water, coffee is one of the fastest-growing categories in Canada. â&#x20AC;˘ Chalk it up in large part to the trend to single serve (+114%, according to ACNielsen MarketTrack Nov. 2012), which has boosted sales in the category. Similarly, sales of single-serve tea and hot chocolate are up 142% and 177%, respectively. And recognition of this growth can lead to ever-increasing opportunities for your business. (continued on next page)

Brewing Up Beverage Sales More Canadians are forgoing take-out coffee in favour of the convenience and savings of single-serve beverages prepared at home, whatever the occasion or time of day. That’s why this type of technology is becoming increasingly popular. Single-serve coffees and other specialty beverages offer a wide range of roasts and flavours under a variety of brands, as well as hot and iced teas/

SINGLE-SERVE TECHNOLOGIES REVOLUTIONIZING THE COFFEE INDUSTRY

coffees, and hot cocoa. These single-serve shoppers not only drive incremental dollars to the coffee category, but also to the total grocery basket, spending about 21% more than the average shopper, according to Nielsen Homescan. Although traditional coffee is still important and growing,many

Single-serve brewers are the most

Keurig is the #1 player in the popular of the kitchen electrics, with a single serve brewer segment

growth of 98% in units versus last year. These types of brewers now account for 46% of the sales, a share gain of 10% versus last year. No surprise they are changing the way people consume (and buy) coffee.

consumers are willing to trade up to premium over mainstream coffee. Following this trend, GMCR Canada’s premium offering, Van Houtte® Specialty Collections – which includes Single Origin, Fair Trade

26%

KEURIG

Organic, and Espresso – grew by 40% in the past year. Recently, the company launched Barista Prima Coffeehouse® K-Cup® packs,

20%

a line of Super Premium coffees for the growing legions of consumers who are willing to pay more for a unique taste –

54%

AUTOMATIC DRIP & ESPRESSO BREWERS

an affordable luxury.

ALL OTHER SINGLE-SERVE BREWERS

Source: NPD All Channels , 52 weeks ending November 2012, includes all coffeemakers and espresso makers, estimated to represent 70% to 80% of the total marketplace.

Source: NPD All Channels,52 weeks ending November 2012, includes all coffeemakers and espresso makers. estimated to represent 70% to 80% of the total market

CATEGORY INSIGHTS

$ Sales evolution of Roast & Ground Coffee category

Ranking of Categories by Abs Chg (000’s) and $Vol %Chg

$177,516

29%

NATIONAL

$1,000,000,000

$126,670

$748,596,204

800,000,000

6% $85,709

13%

$926,682,971 TL Single-Serve Segment

$598,738,365 $79,444

$71,617

600,000,000

$64,529

$59,008 $55,307 $54,475 $51,972

TL Roast and Ground (R&G) EXCL SINGLE-SERVE SEGMENT

400,000,000

200,000,000

Ranking

Coffee: Roast & Ground

Natural Cheese: Exact Weight

Luncheon Meat: Exact Weight

Milk

Bread: Commercial

Eggs

Yogurt Products: Refrigerated

Snack Foods

Chocolate

Household Appliances

Make sure R&G Coffee receives its fair share of the shelf space Source: Nielsen. Top 500 Category ranking, National, All Channels, 52 weeks ending January 14, 2012. Note: excludes remaining and unspecified categories, cosmetic, general merchandising and OTC pharmacy.

STRATEGIC LEADERSHIP

52 WKS 2010

L 52 WKS YA

L 52 WKS

Single Serve brings additional sales to the coffee category Source: Nielsen, MarketTrack, National GB+DR+MM+GM+WC, 52-week period ending November 17th, 2012.

KEY FACTS & FIGURES > Coffee is the most consumed drink after tap water; 65% of the Canadian population drink coffee.1 > 86% of shoppers have planned to buy coffee before they enter the store.2 > Despite the revolution brought by the single-serve segment, traditionnal coffee still represents 73% of the $Sales of the category, and is stable at +1% vs. last year.3 > Among traditionnal coffee, Premium brands (+7%) and Whole Beans (+8%) increased their dollar sales vs. last year.3 > 79% of consumers like the fact that they can buy premium brands at grocery stores.1 > In 2012, 43% of coffee drinkers said they like to experiment with different roasts and blends of coffee, compared with 35% in 2011.1

MERCHANDISING TIPS > T urn your hot beverages

Baskets Containing K-Cup® packs have a higher basket ring than the average basket

section into a destination coffee “boutique” by dedicating a section

Average Basket $Value

In-Store Impact > As coffee is part of most shoppers’ consideration set, retailers should pay attention to this section of the store. > Having an attractive coffee section can be a source of differentiation for the store. > Offering a wide variety of Premium coffees under a dedicated section enhances the shopping experience and can help the retailer become a destination for the shopper.

$88.27 $41.41 AVERAGE SHOPPER*

TL R&G COFFEE SHOPPER

to Premium and Specialty coffees. >A llocate a section to single serve,

$108.11

located at the end of the coffee

TL K-CUP® SHOPPER

section and before hot chocolate and tea, in order to reach consumers from many categories. >M erchandise single-serve products by technology (i.e. Keurig®) , so consumers can easily match them to the machine they have.

1. Coffee Association of Canda, 2012 Coffee Drinking Trends in Canada. 2. G MCR Canada study among a representative sample of 600 coffee shoppers across Canada, March 2011. 3. N ielsen Market Track, National GB+DR+MM, 52 weeks ending November 17 2012.

K-Cup® packs buyers are more valuable to the total store

> I nclude a Bulk Coffee section to satisfy shoppers who are seeking

Source: Nielsen Homescan, National GB+DR+MM, Latest 52 wks ending January 14th 2012. * Average Shopper = for TL Expenditure

a sensory experience and new flavours or blends.

SOURCE OF GROWTH IN TRADITIONAL COFFEE Traditional Coffee Tendency

NOW THE #1 COFFEE BRAND IN CANADA* ®

Van Houtte offers a wide range of products to help shoppers explore the world of coffee.

+7%

$115,523,575

Premium Growth

$434,074,299

$123,935,742

$436,183,060

Premium Coffee

Mainstream Coffee

Mainstream Growth

Latest 52 WKS YA

Latest 52 WKS

Premium Coffee is a source of growth for the traditional coffee segment * Source: ACNielsen Market Track, National GB+DR+MM+GM+WC, 52 weeks ending December 15th 2012.

Source: Nielsen, MarketTrack, National GB+DR+MM, 52-week period ending November 17th, 2012. Mainstream includes Niche & Gourmet Coffee. Mainstream includes Private Label, Maxwell House, Folgers, Nabob & Tim Horton’s.

HOW TO LEAD IN SINGLE SERVE 1. H ave a dedicated space for the single-serve section. 2. D ivide and identify single-serve section by technology, Up/Down sections to facilitate shopping. 3. R egroup the beverages outside coffee (hot cocoa, hot teas, iced coffees/teas) together at a higher eye level and identify the different beverages if feasible (increase awareness). 4. C lassify products by brands and sub-collections (Premium higher, Value lower, single origin, flavoured).

Displays that Differentiate Grocery retailers can differentiate themselves by becoming a coffee destination. Consider adding a Premium Coffee dedicated section with a wide assortment for discriminating shoppers who select their coffee as they would a fine cheese or wine. GMCR Canada believes supermarkets should also include a single-serve section grouped by technology, as shoppers are looking first for products to brew with the machine they have at home. The best-in-class stores now have 12 feet of single serve, 8 feet of which are dedicated to Keurig®. As single-serve products are becoming increasingly popular, retailers will have to re-allocate space to increase the single-serve set without cutting into the popular existing coffee section.

PREMIUM SECTIONS SHOULD INCLUDE A WIDE VARIETY TO CHOOSE FROM According to our shopper study, more involved shoppers: > E xplore coffee

By carrying a variety of K-Cup® packs – caffeinated

> S eek sensory experience

and decaffeinated coffee, flavoured coffee, hot

> L ook for quality

cocoa, iced beverages, and tea – grocers can

> E njoy shopping and spend more time

capture more usage occasions, including breakfast,

Source: qualitative (20 face-to-face interviews) and quantitative study among a representative sample of 600 coffee shoppers across Canada, March 2011.

late morning, lunch, afternoon, dinner, and evening. After all, the more varieties consumers have at home, the more they’ll drink. Source: Kantar Retail Shopper Genetics®, U.S, 2011

OPPORTUNITIES OUTSIDE OF COFFEE NEW FOR SPRING 2013 Snapples® Iced Teas

Single Serve: Source of growth for Tea and Hot Chocolate categories $ Sales Total Tea + Hot Chocolate categories

Snapples®, a well-known brand coming under the Keurig® brewing system.

$12000

$10,626

10000

$7,577

8000

Single Serve Tea

6000 4000

$270,494,311

2000 0 -2000

$260,319,303

-4000

Reg. Tea

TEA

ICED BEVERAGES

HOT COCOA

SALES LAST 52 WKS

-8000

Reg. Hot Chocolate

- $1,441

-6000

SALES YAGO

Single Serve Hot Choc.

- $6,587

Shelf space should be re-allocated within the Tea and Hot Chocolate categories to make room for single serves Source: Nielsen Market Track and Strategic Planner, National GB+DR+MM+GM+WC, Dollars, 52 weeks periods ending November 17th 2012.

Takeaways > Coffee is a dynamic category and is bringing a high dollar growth to the store; make sure you allocate it a fair share of space. > Traditional coffee consumers are trading up: Premium coffees and Whole Bean format are growing faster than the market. > Having a dedicated space with a wide variety of Premium coffees can help the banner differentiate itself. > Single-serve beverages are still growing at triple-digit rate. Make sure you allocate a proper space identified by technology to help consumers find the products that fit with their brewer. > Single-serve segment is expanding outside coffee, creating growth by increasing the usage occasions. Make sure to regroup and better position these new products in order to capture more sales.

SUSTAINABLE ADVANTAGE

uilding demand for sustainable products is one of the key areas on which GMCR Canada is focusing as

part of its commitment towards sustainability. The Van Houtte® coffee brand has been a proud partner of Fairtrade Canada since 2000. As of today,

Future Focus The future growth of coffee remains bright as premium brands and single-serve formats continue to carve out their place in the category. With the consumer becoming more educated about the quality and origin of the coffee they buy, the category will benefit from the trade up in consumption. The opportunities for growth in single serve are also enormous. For example, 40% of households in Germany and even more in other countries, have adopted this technology, versus only 18% in Canada (CNBC, 2011). That translates into 5.5 times more annual sales! As the single-serve category continues to flourish, with innovations at the forefront, Keurig® Brewers’ penetration is expected to have strong growth in the coming years. As GMCR Canada expands into other beverage occasions, it will build additional usage via new products. In the future, grocers should consider expanding their coffee display to capitalize on this fastest-growing category.

three of its five coffee collections are Fairtrade Certified. Likewise, the Timothy’s® coffee brand has been partnering with Rainforest Alliance since 2004. For the fiscal year 2012, 50% of all Timothy’s® coffee sold came from Rainforest Alliance CertifiedTM farms. As consumers are getting more educated about the products they are consuming and their origins, offering sustainable products is essential in today’s market. You can learn more about GMCR Canada’s commitment to sustainability at GmcrCanadaSustainability.ca

EDUCATING THE CONSUMERS To encourage shoppers to discover new coffees, retailers can include educational signage in store. Van Houtte® brand has also developed different digital platforms to share its expertise and help people find premium coffees best suited to their individual taste. MyMasterRoaster.com website includes the Coffee Profile tool and C! The Coffee blog, which contains over 500 articles, tips and recipes on coffee.

STRATEGIC LEADERSHIP

Technology

Grocery Game Changers Technologies that will impact how groceries are sold, sampled and distributed By Sally Praskey

As online shopping continues to gain momentum, traditional grocers are deploying a variety of technologies to bring in customers and keep them involved with the store experience. Some are even choosing to capitalize on the trend by developing their own versions of online shopping services. But whatever their strategy, awareness of these technological “game changers” from around the world will help grocers stay in the game.

Converting “Showroomers” to Buyers

Customers are increasingly treating bricksand-mortar stores like showrooms to check out products in-person, and then use their mobile devices to purchase those products at lower prices online – a particular problem for retailers of big-ticket items, like electronics. But grocery retailers, too, could be at risk. With the increase in smartphone penetration, showrooming is here to stay, says a recently

released retail brief from Montreal-based Aimia, titled Through the Looking Glass: Building Relationships with Retail Showroomers. According to the brief, Millennial consumers (age 19-29) represent at least two-thirds of showroomers in Canada. But it’s not all bad news. The brief reveals that Canadian showroomers are 17 per cent more likely to participate in a retail reward program, and are more willing to share personal data in exchange for rewards and recognition. They are also 10 times more likely to respond to a location-based mobile offer. “Retailers should take advantage of

these behaviours to transform showroomers to become loyal – and paying – customers,” says Rick Ferguson, vice-president, knowledge development, Aimia. Meanwhile, a study by St. Louis-based GroupM Next, titled Showrooming and the Price of Keeping Buyers In-Store, notes that while showroomers – who are most often younger and with lower incomes – base their purchases almost exclusively on price, about 10 per cent of purchasers surveyed chose to complete the purchase in-store no matter what price discount was offered. Another 10 per cent are sensitive to price but can be swayed to stay in-store. The study says sales associates “can be influential, as customers who interact with an associate are 12.5 per cent more likely to purchase in-store.”

The takeaway: “Whether leveraging mobile apps, digital displays or social media, smart retailers can build loyalty with consumers by becoming a partner in their shopping experience,” says the Aimia retail brief.

grocerybusiness.ca

January | February 2013

GSW 2013

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APRIL 14 AND 15, 2013, AT THE VANCOUVER CONVENTION CENTRE

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3 Sampling as Adult Entertainment

Subscription Models = Customer Convenience An extension of online shopping and a variation on the traditional concept of standing orders, online subscription models are becoming increasingly popular. These are regular delivery services that send a particular group of products to subscribers – for example, Amazon.com’s Subscribe & Save program, which offers automatic delivery and savings in a variety of product categories. Other examples include Joyus (formerly Foodzie), for artisanal food products; and Citrus Lane, which sends regular care packages to paying subscribers for children ranging in age from newborn to three years. While these kinds of sites haven’t taken off in Canada as they have in the U.S., it is only a matter of time before they expand here or A case in point: New Canadians find York-based Mantry, a way to which specializes in replicate them foods that men for our market.

should have in their kitchen pantries, recently expanded and now offers its service in Toronto.

grocerybusiness.ca

When Kraft Foods launched a line of desserts for adults called Temptations, it offered an innovative, cheaper – and more entertaining – way for consumers to sample the products. The company teamed up with Intel to develop iSample machines, smart vending kiosks that deliver the right sample to the right person. Using an optical sensor, the kiosk determines the gender and age range of the consumer standing in front of it, and serves up a sample most likely to appeal to him or her. iSample does not collect personal information; it aggregates information about consumer usage patterns by gender and age range across all users. And sorry, kids. This dessert is just for adults, as a humorous message proclaims when children try to use the kiosk. So far, the machines have been piloted in two locations in the U.S.

Tesco goes to the “dark side” to support online shopping U.K. retailer Tesco is expanding its number of “dark stores” in order to cash in on the online shopping boom. So-called dark stores are not open to the public, but are used as inventory depots for nearby grocery stores overwhelmed with the orders generated by Tesco’s thriving online business. So far, there are four dark stores in London, with reportedly more to come. Since its launch in 1997, Tesco’s grocery home-delivery service has grown to be the world’s largest online grocery retailer, with sales of over £2 billion and a selection of some 25,000 products. These dark stores complement the company’s “click and collect” drive-through service, whereby customers can order online and pick up their groceries at a drive-through site. Based on its success in the U.K., Tesco has rolled out online shopping to Ireland, South Korea, the Czech Republic, Poland and Slovakia, and has set its sights on Thailand and Malaysia. It has also developed a prototype 3D Tesco store, which would allow customers to shop the aisles from home, virtually, thereby integrating both the in-store and online shopping experience.

January | February 2013

Leadership by Example by Sally Praskey

hen Johanne Choinière joined Metro Inc. in 1989 as a produce buyer, she had no industry experience. But her strong work ethic and passion for learning were evident, and that landed her the job. As she explains, “I was interviewing with three companies at the time. My last interview was with the vice-president of produce at Metro Inc. I really liked his approach, which was different from the other interviews I’d had. It was really straightforward and direct. He asked me about my experience, but I had none. He said to me: ‘If you can be on call 24 hours a day, seven days a week’ – because that is the nature of produce – ‘and you can handle hard work, we will teach you about produce.’ I really liked that. The vice-president’s name was Robert Sawyer, who

GB: What is your background – what did you do before you joined Metro? JC: I graduated from Bishop’s University in Lennoxville, Que., where I studied Business Administration. I worked briefly for Marks & Spencer, and then moved to Germany for two years. I worked there and travelled all over Europe before returning to Canada to start my career.

3 today is the executive vice-president and COO of Metro Inc., and is my boss once again.” Since then, she has never looked back, earning a succession of promotions and relocating to Toronto from Montreal to assume her current position. “Johanne brings a lot of passion and positive energy to work everyday,” says Eric La Flèche, president and CEO of Metro Inc. “She’s a hard worker, strong-willed and very organized. She has shown initiative and versatility by successfully taking on various challenges over the years, including relocating twice to other cities. She’s a real fighter who has grown to become an effective senior leader at Metro, always putting the company’s interest first.”

GB: What in particular makes grocery retail attractive for you? JC: I chose grocery retail because it was something I felt comfortable with. I’m the oldest in a family of four children. My Mom worked so she decided, when I was 12, that I was old enough and responsible enough to take care of the grocery shopping. The very first time she gave me a list and $100. I told her, just a few weeks

after, that I didn’t need a list anymore. I knew all of the products and prices, and my goal every week (because money was very tight) was to try to feed the whole family with less than $100 so that she could keep the extra cash. I didn’t know it back then, but the store I was shopping at was a small Richelieu store in Cowansville, and Richelieu is actually a banner of Metro Inc. So I guess I was destined.

P H O T O B Y M AT T H E W P L E X M A N

Johanne Choinière

s eni or vi ce -p res i d ent, ontari o d i vi s i on, metro inc.

January | February 2013

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GB: Would you recommend grocery retail as a career choice? JC: I would recommend it because I find it to be a really dynamic industry. It’s always evolving, and it’s part of everybody’s life. One thing that young people might not understand is that there are a lot of opportunities in grocery retail. Depending on your capacity and your experience, you can work in marketing, finance, merchandising, the legal department, or in-store operations. There’s a broad scope of things that you can do. GB: What advice would you give young people coming into the industry? JC: The first thing I would tell them is do the job that nobody wants to do and go to the places where nobody wants to go. Work hard, and work like you own the company. And always treat people, whatever their level, the way you want to be treated. And I would also tell them to be accountable and to never make excuses for mistakes. You’re allowed to make mistakes; just make sure you learn from them. Probably the most important thing is to always work with the highest integrity because it’s a small world, and I believe that you are your reputation. GB: What do you consider to be the essential elements of leadership? JC: I have my own style, but based on my experience, I would say always lead by example. Always walk the talk. Don’t blame others. You are the leader, so be accountable. Make sure you support your team – and

grocerybusiness.ca

make sure they know you support them – because alone you’re not going to achieve much. Again, act and work like it’s your own company. It shouldn’t be any different. Leaders should also welcome adversity, especially in Ontario as it’s such a competitive landscape. Take it on. See it as an opportunity to grow. Always recognize the people and their efforts. You can choose to give negative feedback, but in my opinion positive reinforcement goes a lot further. And finally, I would say to be passionate about what you do and never, ever stand still. Status quo is not an option. As a leader, you have to always keep learning and improving. GB: Does Metro have a training or mentorship program for young people who want to make a career of grocery retail? JC: Absolutely. At Metro, we have a large pool of employees and we recognize that some of them are pursuing their education as they work for us. So we really try to tap into this group of employees for career growth opportunities. We have an annual process for succession planning where we identify high-potential candidates and make sure they have access to the training and tools they need to get to the next position. We have a tuition assistance program that assists those interested in continued learning. We have training programs that are designed to provide our employees in Ontario and Quebec with the skills and abilities they need to build a long career in our company. I would say at least 70 per cent of the time, we promote from within.

Always lead by example. Be accountable. Make sure you support your team – and make sure they know you support them – because alone you’re not going to achieve much.

January | February 2013

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It’s such a competitive market that you can never stand still. You always have to innovate and evolve. 3 GB: What was the best advice you received in your career? JC: Someone once told me: Don’t worry about the future. Just try to be the best at what you’re doing now. Really try to do the best you can in your current position and focus on that. If you do that, promotions will come. I followed that advice, and I would give that advice to young people who are starting out. GB: What was the most important decision you made in your career? JC: Looking back, I think my first and most important decision was picking Metro as the company at which to start my career. I chose the right company, and I would choose it again. I admired Metro for its culture and its values, and that’s still the case 23 years later. GB: What do you find the most exciting about the grocery retail industry right now? JC: It’s such a competitive market, so you can never stand still. You always have to look for ways to improve your business and to innovate and evolve. You have to adapt very rapidly to the changing market trends. And if you want to succeed in the business, you

grocerybusiness.ca

have no choice but to deliver on your customers’ highest expectations. I like the fact that you have to remain open to overcoming adversity. You have to fight every day. I think that’s exciting.

four or five hours of quality time together, which was very rare. Growing up, those fishing weekends with my family taught me hard work and perseverance. And it was a lot of fun.

GB: Tell us a fun or interesting fact that people might not know about you. JC: I love ice fishing. When I was young, every Saturday and Sunday we went ice fishing; all four kids with my parents. We had no choice. I grew up in Quebec, so sometimes it was -25, -35 degrees – but it didn’t matter; we went every weekend. It was actually a lot of work. I think it taught us a great deal about accountability and responsibility because we all had 12 holes that were ours to take care of. There was a mini-competition among us because we wanted to catch the most fish. My parents showed us how to do it once, but after that, if we caught one, we had to unhook it and then put fresh bait on the hook. We had a little hut but we could only go in it to have our lunch. It was hard work but now I show all of the nieces and nephews in our family how to ice fish because we want to make sure we pass down the tradition. I loved it because it was

GB: How long have you lived in Ontario, Johanne? The move from Montreal must have been a big culture change. JC: It was four years this past October. It’s funny because everyone thinks I miss Montreal, but I really enjoy Toronto. There is a difference, for sure, but I love the ethnicity and diversity. I live by Lake Ontario and there are green spaces everywhere. And there’s never a dull moment. GB: Did you benefit from a mentor throughout your career? JC: Not specifically, but I always had great examples to follow. The first one was Mr. Lessard, who is our executive chairman of the board at Metro. And throughout my career I worked closely with Mr. La Flèche, who is our president and CEO. These are two men that I truly admire, and I learned quite a bit just by listening and watching them.

January | February 2013

Passion, integrity and authenticity are the driving forces behind Grocery Business’s

INFLUEN IAL

MOST

By Sally Praskey and Noelle Stapinsky

W MEN

CHERYL SMITH

Notable: Recognized as one of Canada’s Top 100 Most Powerful Women.

It comes as no surprise that Women’s Executive Network Canada named Cheryl Smith to its Most Powerful Women Top 100 in the corporate executive category for 2012. “Cheryl’s leadership and commitment to Parmalat’s brands is unwavering, and we are proud of her Top 100 recognition,” says Nash Lakha, president and CEO of Parmalat Canada. 36

January | February 2013

Executive Vice-President, Sales and Marketing, Cheese, Tablespreads and Cultured, Parmalat Canada Smith is a 22-year industry veteran who began her CPG career at Unilever. She was recruited based on her award-winning thesis – Defensive Marketing: Measuring the Profitability of Consumer Complaints Handling – for her Master of Applied Science degree in Management at the University of Waterloo. During her 13 years at Parmalat Canada, Smith has assumed positions of increas-

ing responsibility, and Parmalat has achieved the best-selling nationally ranked item status in cheese, yogourt, butter, premium milk, snack cheese and premium aged cheddar with brands such as Black Diamond, Astro, Lactantia, Cheestrings, Balderson and Beatrice. Smith now oversees sales and marketing for the company’s cheese, tablespreads and cultured businesses.

Profiles in Leadership, 2013

What qualities do you look for when hiring staff? Beyond the necessary technical skills, it’s passion that differentiates candidates. Passion for our brands, and then demonstrating that passion by taking full ownership of our business. How important is diversity in the workplace? Diversity is very important. It ensures competitive advantage. We need to hire from the whole universe of top talent – exclusion of any group will result in long-term competitive disadvantage. It’s critical that men support women. But it is also important that women support women. There is so much opportunity for good business people, and all resources should be utilized. Does Parmalat reflect that diversity? I’m very proud of Parmalat’s inclusiveness, and that’s really driven from the top. We hire the best people for the job, and the best includes both men and women. What do you consider the essential qualities of leadership? It is being able to effectively communicate the vision, and empower individuals to execute against clear objectives. It is important to celebrate successes along the way, and regroup and learn from the challenges in order to move forward with passion. And in this fast-paced business environment, a sense of urgency is critical. What is an interesting fact that people may not know about you? I’m a farm girl at heart. I really enjoy horses. That’s from my childhood, but now that my children are old enough to ride on their own, I’ve been horseback riding more often. Also, dairy is in my roots. My mother’s family had dairy farms, and now I work for Parmalat!

grocerybusiness.ca

DIANE BRISEBOIS

President and CEO Retail Council of Canada

What do you consider the essential qualities of leadership? I believe important leadership qualities include honesty, intelligence, empathy, courage, vision and creativity. Leaders need to foster an environment that demands honest, transparent and courageous communication in order to develop high levels of trust and respect. What is your most significant accomplishment as president of the RCC? To have built a team that is dedicated to the industry and its well-being. What can the industry do to attract young people to retail as a career? While I believe the industry has made substantial progress in this area over the last decade, it could still learn from other industry sectors in regards to how one recruits at college and university levels. Retailers need to be more present on campus, participate in

Notable: Recipient of the Canadian Society for Association Executives highly prestigious Pinnacle Award for outstanding leadership.

and support internship and co-op programs, and provide more scholarships and mentoring programs. Do you think that women are well represented within the senior ranks of retail in Canada? I believe women have made great strides in this area, but not in all segments of the retail sector. Women are better represented at the senior ranks in general merchandise retail versus other sectors, such as grocery. There is still much more that could be done to increase the representation of women in the corporate office. The sector could do much more in diversity hiring – not just women, but also visible minorities. What is your business mantra? What we know isn’t as important as what we can learn.

January | February 2013

What role has innovation played in the growth of Burnbrae Farms? Innovation has played a very big role in our growth. Some product categories, such as Naturegg Omega 3 shell eggs, that are now a large part of our business, didn’t exist prior to 1995. These products have also driven category management strategies with our customers, and have greatly improved category profitability. What do you consider the essential qualities of leadership? In my view, leadership means being decisive while creating an open environment where employees are free to offer their opinions and are actively engaged in contributing to decisions in their area of expertise. Not only does this drive better decision-making for the organization, it ensures a more engaged employee base. How much does instinct play into your decision-making process? We are very entrepreneurial at Burnbrae, and instinct often plays a big part in our decision-making. However, we are always working to build-in more processes with pre- and post-analysis on all major projects. What is your business mantra? I would sum up our business approach/mantra as “Growth through innovation.” What is an interesting fact that people may not know about you? I began picking eggs for $2 an hour when I was eight years old, which led to a decade-long part-time job. That bought a lot of candy in the Village of Lyn when I was a child.

MARGARET HUDSON President, Burnbrae Farms Canada Notable: Burnbrae Farms was chosen as one of Canada’s Best Managed Companies in 2012, and has the most Grand Prix wins for product innovation. Notable: Created the first carbon credit program in the industry.

BELINDA JUNKIN 38

January | February 2013

president and CEO, Canadian Pallet Council

Profiles in Leadership, 2013

KAREN KUWAHARA

President, NestlÉ Purina petcare Canada Why was CPG an attractive career choice for you? When I graduated from business school, I was interested in marketing. The best entry was through CPG, which was recognized as providing terrific training. And I enjoy the industry as much today as when I started out. Why do you think this industry is a good career choice for young people? This is a dynamic and constantly changing industry that plays an integral role in many of today’s high-priority social issues such as food safety and supply, environmental sustainability, and health and wellness. We need young people with fresh ideas, energy and passion to help shape the future of the industry.

What do you consider the essential qualities of leadership? I’d say that the two distinguishing qualities are passion and the ability to inspire and engage others. Leaders also understand the importance of teams and the power of many working towards a common goal. Supporting staff members and recognizing the value they bring to their work helps create and maintain highperformance teams. What is an interesting fact that people may not know about you? While playing a social basketball game with our agency years ago, I was nicknamed “Too Tall.” I’m five feet tall, but to this day some remember this and will sometimes refer to me by this nickname.

What are the main benefits of the carbon credit program? The program reduces costs, which attracts companies to the program, but it also, of course, reduces carbon emissions and monetizes the resulting carbon credits. What do you consider the essential qualities of leadership? Vision, passion and being authentic. You have to live it and believe in what you are doing. You have to walk the talk. Continuous learning, the ability to collaborate, and mentoring and being mentored are also very important.

Notable: Helped establish the Nestlé Purina PetCare Canada Chair in Communications at the University of Guelph

What is your business mantra? I joke that “pallets are my passion,” but it’s true. I believe in the program – it works, and I am passionate about it. What is an interesting fact that people may not know about you? I enjoy travelling to other parts of the world. grocerybusiness.ca

January | February 2013

Describe your background and how you got involved in GS1 Canada. I owned my own business for seven years, and then worked for Home Depot when it first came to Canada. I was recruited to GS1 – the attraction was the opportunity to build something and to stretch. I have been with them for 10 years, moving through several roles before becoming COO.

EILEEN MACDONALD Chief Operating Officer GS1 Canada Notable: Led GS1 Canada to institute globally recognized supply chain standards.

What is GS1 Canada’s most significant accomplishment? The accomplishment, from a global perspective, is our capacity to facilitate international collaboration. Specifically, it’s to bring together not only the organizations, but the individuals who represent them from over 145 countries, and to ensure that the proper foundations for communications are in place to enable global trade. Of all the sectors – and we deal with over 20 – grocery is the one that really leads the pack. We can take what we learn from grocery and transfer that into other sectors.

What do you consider the essential qualities of leadership? I think it starts with integrity – it permeates through everything you do. You need to have courage as a leader. You need to be passionate. Trust – you can attach that to integrity, but it needs to be reciprocal, so it’s not only that I can be trusted, but that I have the ability to trust my team. You have to be able to take risk. Communications – you must have the capacity to clearly articulate the big picture and vision. And you need to walk the talk, so that people will follow. What is your business mantra? I believe that business is all about people – cultivating relationships of trust and integrity. Surrounding yourself with these individuals is truly the key to success. What is an interesting fact that people may not know about you? I love to dance! Also, I come from a large family – six sisters who are my best friends. And I have eight children – four boys and four girls.

ROSANNE LONGO

chair, longo's family charitable foundation Tell us more about the Longo’s Family Charitable Foundation (LFCF). The LFCF is dedicated to the support of children’s and women’s causes, with a strong focus on health and fostering a sense of community. One of the ways we raise funds is through our annual golf tournament, which has been running for over 20 years and attracts 450 golfers each year.

January | February 2013

What do you consider the essential qualities of leadership? I think passion is important. When leaders are passionate about life and work, that inspires others and motivates you to be on a journey of continuous learning.

Profiles in Leadership, 2013 KATHY MARTIN

Senior Vice-president, Human Resources Loblaw Companies Limited How did you get involved in retail? I joined Loblaw, and grocery in particular, because I love the idea of working for an iconic Canadian company and I love food. Plus, grocery retailing is just so close to the customer. Would you recommend grocery retailing as a career? I think that if you are a person who is motivated by seeing results quickly and enjoy the innovation around food, then grocery retailing is a really attractive place to be. You’ve been involved with Loblaw’s diversity programs, which has led to some interesting opportunities. Yes, one of the principles Loblaw put in place a number of years ago was to be a company that reflects the country’s diversity. And then four months ago, the federal government announced a research project titled Labour Market Opportunities for Persons with

In addition to your LFCF role, you are also the Longo’s spokesperson. With the consumer changing so rapidly, what must retailers do to stay relevant? Consumers are more food savvy than ever and so our role, through our team of experts, is to provide ideas and solutions around healthy and convenient food options. And, as retailers, we need to keep listening to our customers and be willing to move with the trends. As a company, I think it’s important that we are consistent in our vision of staying true to our roots and core strengths.

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Disabilities. Loblaw was named to this panel, and I was asked to serve. It was an honour to be asked, and it’s been a real learning experience. We have been conducting research into best practices in a number of companies and have just reported our findings. It was obvious that there are many opportunities to do more, so we’ll see what happens from here. What do you consider the essential qualities of leadership? I see passion and authenticity as very important because that inspires trust in the people around you. What is your business mantra? Attitude is everything. It can make you or break you. Choose wisely!

Notable: Involved in the innovative grad@loblaw university recruitment program and appointed to the federal government’s Labour Market Opportunities for Persons with Disabilities advisory committee.

What is an interesting fact that people may not know about you? I use to sing jazz and blues for a living, and still do it for fun.

What is your business mantra? Our founders always taught us to “treat others the way you want to be treated,” and that has served us well in life and as a business mantra no matter who we are dealing with – customers, team members, vendor-partners and community partners. What is an interesting fact that people may not know about you? I play left wing on a women’s hockey team. The league started about four years ago, and we play once a week.

Notable: Longo’s Family Charitable Foundation has assisted numerous charitable organizations by giving more than $3 million in fundraising dollars to Toronto’s Sick Kids, women’s and children’s charities, local hospitals, and kids’ camps in the Greater Toronto Area.

January | February 2013

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Profiles in Leadership, 2013

What do you consider the essential qualities of leadership? It’s a number of things. It takes passion, a strong vision for the future, and effective communication, and an ability to delegate. What is the most important issue facing CPG manufacturers? The biggest challenges are finding ways to grow in a flat market while continually innovating across the entire supply chain. It has to be true innovation of processes and systems in order to stay competitive, and innovation with new products to continually meet changing consumer needs.

Are women well represented in the industry? There are a number of female leaders in the industry, and I think that women are well represented overall. But are there as many as there should be? No, absolutely not. It’s our responsibility as an industry to mentor and sponsor women and to provide a work environment that provides the flexibility needed for women to move up through organizations while managing their family responsibilities. What is your business mantra? I value honesty and trust, and always being true to your word. I follow this motto in life and in business. What is an interesting fact that people might not know about you? I was originally planning on becoming a vet, but instead ended up with a B.Sc. and a registered dietician degree.

NANCY CROITORU

CEO, Food and Consumer Products of Canada Notable: In October 2012, was named as one of Canada’s Top 25 Women of Influence.

CORI BONINA

President, Stong’s Market Ltd. and Cori’s Kitchen Inc.

Notable: Industry innovator and first female Chair of the Canadian Federation of Independent Grocers.

grocerybusiness.ca

Your store in Vancouver is a laboratory for ideas. What do you consider your most successful product launch? It’s difficult to choose just one because we are considered a launch pad for new products. Food manufacturers, chefs, and even restaurants come to us for help in marketing and developing new products. Our most famous product affiliation would be Leslie Stowe Raincoast Crisps, which are now sold throughout North America. What do you consider the essential qualities of leadership? The main quality of a leader is the ability to communicate and to surround yourself with a great team that is given the latitude to succeed.

Can you tell us about Cori’s Kitchen? I’ve taken my passion for cooking and developed a state-of-the-art cooking facility which creates Cori’s Kitchen products for distribution to dozens of independent stores across B.C. What is your business mantra? Never be satisfied with the status quo. What is an interesting fact that people may not know about you? I’m an art lover and collector.

January | February 2013

The world didn’t even know what a coffee filter was until we invented it in 1908. And now our newest innovation is set to revolutionize the coffee industry once again. But don’t worry, you don’t need a new machine – it will work with most* brewers using Keurig Incorporated Brewing Systems. Find out more about the full-flavoured future of single serve at Melitta.ca.

*Melitta coffee pods are not affiliated with, nor approved by, Keurig Incorporated. Melitta coffee pods are not designated to work with VUE brewing systems. VUE is a registered trademark of Keurig Incorporated.

Coffee Report

CoffeE

Buzz Whether it’s getting that morning fix, grabbing a cup on the go or taking a break at work, Canadians love a good cup of Joe. In fact, the Coffee Association of Canada’s annual Coffee Drinking Trends Study – conducted by Maritz Research – shows that two-thirds of adult Canadians drink coffee every day, and 80 per cent consume it on a weekly basis. by Noelle Stapinsky

grocerybusiness.ca

January | February 2013

Coffee Report

According to Robert Carter, executive director of The NPD Group, Canadians average about two coffees per day, with 67 per cent brewing their java at home, and 37 per cent buying coffee at restaurants. Canada is second only to Italy when it comes to the percentage of cups of coffee consumed away from home. “The away-from-home market that sells coffee in Canada is huge,” says Sandy McAlpine, president of the Coffee Association of Canada. “The habit develops easily because of accessibility. We have proportionally more coffeefocused stores per capita than the U.S. And the overall quality of competition happens at a slightly higher level in the grocery stores, specialty stores, and coffee and donut shops.”

The café culture in Canada has had a significant influence on consumers. Canadian coffee drinkers are more educated; their palates are evolving; and, while they demand quality and variety, they also want it fast and cheap. “Espresso-based beverages and iced coffee, which were considered trends in the past, are now fixtures in the marketplace,” says McAlpine. Along with traditional coffee, consumers expect specialty beverages, not just from all foodservice operations, but at home too. It’s this demand that is propelling the extraordinary growth of the single-serve category, which has been deemed the most disruptive technology to ever hit the market.

All coffee beverages consumed in-home by age % + - refers to 2012 vs. 2011

100% 80%

+4%

60% 40% 20%

+10%

+5%

-7%

-10%

0% 18-24

25-34

35-49

50-64

65+

Source: Coffee Association of Canada. Coffee Drinking Trends in Canada 2012 Tracking Report prepared by Maritz.

Some Like It Hot – Out of Home Robert Carter, executive director of NPD Group, says the fastest-growing coffee consuming demographic is the 24-and-under group. “They have increased their consumption over the past three years,” says Carter. “Items such as iced coffee, lattes and other specialty-type beverages – with sweeter flavour profiles – are really resonating with the younger consumers.” But while this young demographic consumes most of its coffee beverages out of home, the innovation in single-serve technology has captured its attention.

January | February 2013

This is a great opportunity for grocery retailers to maximize sales. Increasing SKUs for the various formats will better meet the needs of the diverse hot-beverage preferences in today’s households. Apart from the regular gift-giving seasons, sales of single-serve brewers and products spike around the back-to-school time of year, which Carter says is driven mainly by this younger demographic moving out for post-secondary education.

Coffee Report CAFÉ ASSOCIATION DU CANADA

COFFEE ASSOCIATION OF CANADA

Where consumers shop for their homebrew % + - refers to 2012 vs. 2011

The coffee industry is abuzz with innovations in brewing technologies, and consumers are getting hooked on the ease of preparation – with the touch of a button, they can brew up whatever beverage they desire, whether specialty or traditional coffee. And such a shift in the in-home coffee market has created a wealth of opportunities for manufacturers, retailers and foodservice alike. “Tim Hortons, Starbucks and Second Cup, for example, are getting into the category and extending their brands to in-home,” says Carter. “From a consumer perspective, this is good news. And from a brand extension perspective – from restaurant into grocery – this is really good news.” McAlpine agrees. “Single-serve products offer a unique dollar-value

proposition that works for everybody. Grocery and manufacturer relationships can be fairly competitive, but here’s something that’s creating better margins for both parties, and allows retailers to enter into the system with their own brands. It also allows foodservice brands to get into grocery. It’s a win for everyone.” While sales of traditional ground coffee and instant coffee – with a 69 per cent and 29 per cent in-home penetration, respectively – remain strong in the grocery aisle, a wide variety of singleserve cups, pods and cartridges, all developed for specific machine platforms, are entering the marketplace. To stay in the game, McAlpine suggests that grocery retailers reconsider how much aisle space they allot to the hot beverage category.

Grocery Store

69% +3%

Club Stores

+33%

Discount Store

6% Gourmet Specialty Coffee Store

5% Food Service Location 2%

-33%

Source: Coffee Association of Canada. Coffee Drinking Trends in Canada 2012 Tracking Report prepared by Maritz.

Type of coffee, made at home or work % + - refers to 2012 vs. 2011

Source: Coffee Association of Canada. Coffee Drinking Trends in Canada 2012 Tracking Report prepared by Maritz.

grocerybusiness.ca

January | February 2013

Coffee Report

CAFÉ ASSOCIATION DU CANADA

Let’s “Face” It As the single-serve segment continues to take off, grocery retailers won’t be able to keep squeezing more products into the coffee aisle. Instead, shelf management will be the key. “The most important advice [for retailers] is to be sure to dedicate a section to single serve (a minimum of 12 feet) with clear signage for each technology to help guide consumers looking for the product to use with the machine they have at home,” says Mathieu Gadbois, director of at-home trade marketing for GMCR Canada Holding Inc., supplier of Keurig systems and K-Cup® packs. And while the single-serve expansion has taken place mostly in the traditional coffee aisle in the last year, Gadbois points out that this growth is coming not just from coffee, but also from other hot and cold beverages – including iced tea and hot chocolate. To accommodate such growth, grocers will have to usurp shelf space from other categories. “Traditional coffee is still increasing and is a dynamic segment,” says Gadbois. “To help consumers discover the diversity of coffee, retailers should make sure they dedicate space to premium coffees as well.” Gift-giving seasons dramatically influence the single-serve category. “A lot of people don’t set out to buy the single-serve machines, but instead they often receive one as a gift,” says Sandy McAlpine, president of the Coffee 48

January | February 2013

COFFEE ASSOCIATION OF CANADA

Coffee Maker Ownership Association of Canada. “Then they are in this new category, which they seem to rapidly accept.” To get ready for peak sales seasons such as Mother’s Day, back-to-school and Christmas – a sufficient inventory of machines and single-serve coffee products is vital to meet consumer demands.

Ali Davies, director of Tassimo sales, suggests displaying the brewers as in/out opportunities during peak periods, and matching displays and advertising with the whole system – featuring the brewers and accompanying coffee products. Planning for after the holiday season is also essential – single-serve product sales double between December and January as many new owners of single-serve machines visit stores to replenish their coffee products. “Retailers need to make sure they merchandise these products well in order to become a destination for shoppers,” says Isabelle PasquetGeairon, vice-president of marketing at GMCR Canada Holding Inc. While grocery retailers don’t typically sell kitchen appliances, allotting end aisles and shelf space along with the corresponding products to help simplify purchasing decisions.

% + - refers to 2012 vs. 2011

More than three-quarters (78%) of Canadian adults own at least one coffee brewer. Ownership of multiple cup brewers and kettles is down because of the growth of single cup machines.

Multicup brewer

Single cup brewer

SHARE 12% -7%

Kettle (for instant) Single cup machine (pod, disc, cartridge)

Percolator

53% -13%

30% -14% 15% +115% 13% -7%

Automatic espresso machine

5% -17%

Manual espresso machine

5% 0%

French press

9% -10%

Source: Coffee Association of Canada. Coffee Drinking Trends in Canada 2012 Tracking Report prepared by Maritz.

THE ‘X’ FACTOR by Gabriella Nobrega

Left to right: Joan Toth, Michele Hardinge, Karen Young, Lori Galati, Carla Anger, Stacey Kravitz

Women in the CPG/Retail C-suite:

More women in leadership roles = A better ROI When it comes to improving the bottom line, a landmark study suggests Canada’s consumer products and retail companies must tackle one of the biggest and perhaps most complex challenges our industry faces: Canadian women overwhelmingly make and influence household buying decisions, including 85 per cent of the grocery basket, but they are not equally represented in the C-suite.

Women in consumer products Non-durable goods manufacturing companies

CEOs

2.2%

Board Directors

Women, Leadership and the Power of the Purse: Gender Diversity in Canadian CPG Retail Industry, recently published by the Network of Executive Women, provides current and compelling insights into the power of women consumers, the business case for female leadership and the state of gender diversity in the consumer products/retail industry, including a window into efforts by industry leaders to advance women to leadership roles.

12.0%

Senior Officers

15.2%

Women grads outpace men University graduates, 25 to 29 years old, 1971-2006 32%

46%

51%

58%

60%

Women Men

68%

54%

49%

42%

1971

1981

1991

2001

Recently, we sat down with industry leaders to discuss the study’s findings, including best practices in mentoring, training, networking and other career development opportunities for women employed by Canadian companies. These leaders are all part of NEW – the Network of Executive Women – a U.S.-based industry group which has recently expanded into Canada and is focused on helping the industry collectively advance its efforts when it comes to diversity and creating a talent pipeline.

40% 2006

Source: Network of Executive Women

grocerybusiness.ca

January | February 2013

of female respondents from Canada’s consumer products/retail industry believe qualified women are often bypassed for promotion in favour of less qualified men, more than twice male respondents (17 per cent), according to the NEW study

WHAT IS THE MISSION OF THE NETWORK OF EXECUTIVE WOMEN? Joan Toth, president and CEO, Network of Executive Woman: NEW was established with a mission to advance, attract and retain women in the consumer goods and retail industry through education, leadership and business development. Since 2001, we’ve provided diversity best practices, research, learning events, networking programs and scholarships to foster the success of our industry. Today, more than 400 companies belong to NEW and more than 6,000 emerging leaders and senior-level men and women belong to the growing network, including 18 regions in the United States and, now, one in Canada. WHEN AND WHY DID IT EXPAND INTO CANADA? Toth: The fall 2010 launch of NEW Toronto marked our first expansion outside of the United States. The synergies and leverage opportunities were clear, especially given so many of our members operate north and south of the border. While Canadian and U.S. companies may define diversity differently, the positive impact it brings to the bottom line is identical. On both sides of the border, women want to and can contribute more.

WHO ARE SOME OF THE MEMBER COMPANIES? Toth: As of press time, NEW Toronto had 260 members and 17 sponsors, representing the industry’s largest companies (See full list of members and sponsors). NEW Toronto is one of the Network’s fastestgrowing regions. Karen Young, Nestlé Waters Canada, GM, Co-Chair, NEW Toronto: The response has been incredibly positive. Our next goal is to recruit more retailers and have more men become engaged in the Network in Canada. This diversity among the membership and committee leads has been a key part of the Network’s success in the United States. WHY IS THERE A NEED FOR NEW IN THE CPG/RETAIL WORLD? Toth: Women, Leadership and the Power of the Purse confirms career barriers persist for women in Canada’s consumer products/retail industry. A lack of appreciation and valuing of women’s abilities, less access to networking and mentoring opportunities, a persistent gender gap in wages and salaries, and the reality that the majority of women in Canada continue to bear primary responsibility for child rearing and family life have yet to be fully addressed by work/life policies and approaches. Lori Galati Aguiar, director of HR with The Clorox Company of Canada Ltd., regional secretary, NEW Toronto: NEW offers very real and tangible benefits to the industry’s HR leaders,

KEY OBJECTIVES : NETWORK OF EXECUTIVE WOMEN

NEW offers a wide range of services and online tools at wxnetwork.com:

Career Development and Networking • Leadership opportunities • Career workshops, informal mentoring • Member Directory - Connect and communicate with over 3,000 fellow members registered online

Contribute to best practices in diversity and inclusion including career advancement for women in leadership positions Become the largest (most robust) national CPG & Retail network for industry

January | February 2013

Conferences, Events • NEW Leadership Summit • Regional programs and mixer events

Education • Best practices for diversity and inclusion • Knowledge bank • NEW Leadership Academy • Research surveys • Special reports Online Tools • Networking and collaboration tools • Regional Group Pages • Job Bank • Member Directory • Videos

NETWORK OF EXECUTIVE WOMEN, TORONTO sponsor companies and individual members, not the least of which is its specific focus on our industry. The study puts the areas that require the attention of our industry leaders in our lap. With the arrival of NEW, we’re starting, for the first time as an industry, to have more robust discussions about not only the challenges, but the best practices we can adopt to address them.

The study confirms that at the current rate of change, it will take 150 years before women and men are equally likely to reach middle management Michele Hardinge, senior vice-president, Fresh Food at Walmart Canada, co-chair, NEW Toronto: The numbers don’t lie; companies that embrace diversity win. There are many studies from NEW, Catalyst, the Conference Board and others that clearly show companies are more profitable when they embrace diversity. At the end of the day, it’s about the business. No company can afford low morale, high turnover, missed innovation and other costs associated with the lack of advancement for female leaders. There’s also a cost to our industry in not being positioned as a career destination of choice. As the market gets more competitive within and outside our industry, we have to put a premium on efforts that allow the best talent to thrive. THE WOMEN OF NEW AND WHY THEY BECAME INVOLVED: Stacey Kravitz, customer vice-president, Kraft Canada, regional leader, NEW Toronto: Through the Kraft Foods sponsorship, I was exposed to NEW in the United States prior to its arrival in Canada and was immediately attracted to the fact that the organization was solely focused on CPG and the positive impact it was having, helping women and men come together to create engaging, diverse cultures. The reality is the career trajectory of men and women is not the same, especially in leadership. On a more personal level, women need to ask for what they want taking into account the choices – which some might refer to as sacrifices – as it may not be possible to have it all. It’s also important we take ownership to mentor and sponsor one another with a view to advance the business. grocerybusiness.ca

MEMBERS: 3M Canada Accenture Acosta Sales & Marketing Arla Foods Breakthrough Communications Campbell Company of Canada Canada Safeway Canadian Grocer CB Powell Limited Coca-Cola Company Coca-Cola Refreshments Canada Colgate-Palmolive Company ConAgra Foods Costco Wholesale Corporation Coty Canada Inc. Crossmark Del Monte Canada Deloitte & Touche LLP Dr. Oetker Canada Ltd. Faye Clack Communications Inc. Food & Consumer Products of Canada Frank T Ross General Mills GlaxoSmithKline Grocery Business Media Hershey Canada Inc. Home Depot of Canada Inc. Hormel Canada Ltd.

HORN Italpasta Limited J.M. Smucker, Canada Journey Freight International Kalypso Kellogg KERRY Inc. Kimberly-Clark Canada Kraft Canada Inc./Kraft Foods Inc. Kruger Products L.P. Loblaw Companies Ltd. Lowe’s Canada Mars-Philter Inc. MCA Melitta Canada Inc. METRO Inc. Moore Packaging Corporation Mosaic Sales Solutions Nestlé Canada Inc. Nestlé Waters Canada/ Nestlé Waters NA, Inc. Nose Knows Design Ocean Spray Cranberries PepsiCo Beverages Canada PepsiCo Foods Canada Pivotal Solutions SC Johnson and Son Ltd. Shoppers Drug Mart Smucker Foods of Canada Corp. Storck Canada Inc. Storesupport Canada Sun Products Corp.

Target Corporation – Canada Tetra Pak Canada Inc. The Clorox Company of Canada The Grocery Foundation The Key Search Group The Nielsen Company Tim Hortons Tree of Life ULC Unilever VIDPro Inc. Walmart Canada * Memberships are both corporate and individual

SPONSORS: The Nielsen Company Clorox Canada Kimberly-Clark Canada Nestlé Waters Canada Deloitte Kraft Canada Walmart Canada ConAgra Foods McCormick and Company Kerry Ingredients Sun Products SC Johnson Lowes MCA HORN Pivotal Food & Consumer Products of Canada

Carla Anger, vice-president, customer development Canada, KimberlyClark, NEW Toronto regional leader: Some day there will be no need for the Network of Executive Women. While we’re not there yet, NEW is helping to stimulate discussion and engage all leaders in the change that is necessary. We’re making some headway on annual salaries at the manager level, but have flatlined in absolute terms: In 2006 there were actually fewer women in management positions (36.3 per cent) than there were in 1996 (37 per cent). NEW is laying the resources at our doorstep. We now have to go one extra step to come together so we all can look back and say, we did it. January | February 2013

Félicitation POUR VOTRE

85 EM ANNIVERSAIRE Nous sommes honorés d’être le partenaire de Co-op Atlantique

Congratulations ON YOUR

85 TH ANNIVERSARY We are honoured to partner with Co-op Atlantic

WWW.COURCHESNELAROSE.COM

•

T: 514-525-6381

•

MONTREAL, QUEBEC, CANADA

CO-OP ATLANTIC

85YEARS AND COUNTING By Sally Praskey

Paul-Émile Légère Chief Executive Officer Co-op Atlantic

grocerybusiness.ca

Perhaps it was destiny that led Paul-Émile Légère to Co-op Atlantic. After all, the CEO’s first summer job while a student at the University of Moncton was in the human resources and accounting departments of the co-operative wholesaler. “I’ve been a member of the Co-op all my life, so I understand the values and principles, and feel very comfortable with the environment,” says the native Maritimer. Légère is particularly proud of Co-op Atlantic’s focus on giving back to the community. He points out that, over the last year, the wholesaler and its members donated $4 million to local causes, including the United Way campaign, the Drive Away Hunger food drive, the IWK and Janeway Children’s Hospitals, and their own Feed the Need annual food donation drive. “That’s a sizeable amount of money for a small

Congratulations

Years of outstanding growth and success!

organization like ours,” he says. “It shows our perspective and the importance of supporting our communities.” Not only do Co-op Atlantic and its memberstores contribute through charitable donations and sponsorship of community organizations and events, but most of the stores also return a portion of their profits to their members each year.

Born of a Need Co-op Atlantic, originally incorporated as Maritime Livestock Board, was started in 1927 by a group of farmers looking for fair prices for their products. It is now the second-largest co-operative wholesaler in Canada, the largest co-operative organization in the Atlantic provinces, and Atlantic Canada’s only grower-to-grocer food provider.

Happy 85th Anniversary

Co-op Atlantic from your partners at

Congratulations

CO-OP ATLANTIC

On 85 Great Years! from your friends at

New!

Congratulations

5 8

CO-OP ATLANTIC on your

Lassonde NO SUGGAR ADDED

New! 1.36L FORMAT

January | February 2013

Anniversary

CO-OP ATLANTIC

85YEARS Owned by more than 100 co-operatively owned retail businesses across Atlantic Canada and the Magdalen Islands, it also provides food, agricultural, energy, and social housing/real estate services to organizations and businesses in more than 180 communities in the region. Besides its member stores, Co-op Atlantic manages three privatebanner formats – Valufoods and VillageMART grocery stores, and RiteSTOP convenience stores. “Those banners are a way for us to keep our trucks full and our costs down for our member-owners,” says Légère. The wholesaler also partners with The Medicine Shoppe franchise, whose pharmacies are situated in several of its stores. While buy local has long been a mantra of Co-op Atlantic, the organization takes it to new heights by working with producers all over the region to help them grow the food that goes on the table. In what the wholesaler calls a “reciprocal relationship,” it partners with producers by selling them the seed, feed, and other products they need, and advising them – through its Agricultural Division’s agrologists, lab technicians and crop specialists – on best practices.

The

Co-operative Difference

A co-operative is a unique business model. Owned by the members, who use its services or are employed there, co-operatives exist in virtually every sector of the economy. Truly cradle to grave, you could be born in a healthcare co-op and buried in a funeral co-op. You could also bank at a credit union, eat food produced by agricultural co-ops, buy that food at a retail co-op, live in a housing co-op, send your kids to a child-care co-op – and so on, touching virtually every aspect of one’s life. There are about 9,000 co-operatives in Canada, of which more than 650 are retail co-operatives. Co-ops are based on the values of democracy, equality, equity, self-help, solidarity, and social responsibility. They differ from other businesses in three key ways: Their primary purpose is to meet the common needs of their members, rather

grocerybusiness.ca

than maximize profits for shareholders; they use a one-member/one-vote system in order to serve the common need, rather than the one-vote-per-share system used by most businesses; and they share profits among their member-owners based on how much they use the co-op, not how many shares they hold. “This is democracy in business,” says Roméo Cormier, public affairs manager at Co-op Atlantic. “It is not one dollar, one vote; it is one person, one vote.” The corporate governance model of co-operatives is very different from that of other businesses. For example, in the case of Co-op Atlantic, the independent stores own the wholesaler, and the members own their particular store. “I look at our shoppers as more than a consumer,” says David MacDonald, manager of Cheticamp Co-op. “They’re part-

owners, and we rely on them to help manage the store,” through a board of directors comprising local residents who also shop there. It is a unique situation when the stores own the supplier, notes Cormier. Board members and managers don’t hesitate to express any concerns they may have, and Co-op Atlantic listens – and acts on them, he adds. Although Cheticamp Co-op operates independently, MacDonald says it owes a lot of its success to having a strong Co-op Atlantic head office. “They negotiate with the suppliers, provide training, and we feel they have our interests at heart. And in return, we agree to buy their product and participate in the democratic process by attending meetings, and there are financial contributions. So it’s kind of like a full circle. They operate the same way we operate in the community.”

January | February 2013

Congratulations

CO-OP ATLANTIC on your

85th Anniversary from a trusted supplier for over 60 years!

A.G. Brown & Sons Limited

A Complete Sales and Merchandising Service Throughout the Atlantic Provices

and the many great br ands we represent in atl antic canada

Head office: 3500 Kempt Rd., Halifa x, Nova Scotia â&#x20AC;˘ 902-453-0350

CO-OP ATLANTIC

85YEARS

Facts

and Figures co-op ATLANTIC employs approximately

720 people in the four Atlantic 130 in its corporate

provinces and another

Co-op Food Market stores. Its members include

99 retail co-ops

(grocery, general merchandise, and country stores), as well as three buying clubs and 15 agricultural societies for whom it offers groceries, general merchandise, produce, meat, and agricultural products and equipment.

It manages two private-banner formats: Valufoods and VillageMART grocery stores, and RiteSTOP convenience stores, all operated by independents. In the fiscal year ended January 2012, total sales were

$604 million. food sales accounted for $273 million, agricultural sales $119 million, energy

In return, its stores sell the meat and produce raised by these farmers, knowing the products meet the highest standards. “These reciprocal relationships are ultimately an advantage to us and to the producers, and have the constant focus of ensuring viability for our member co-ops,” explains Léo LeBlanc, corporate secretary and vice-president of human resources and corporate affairs. Co-op Atlantic has expertise in animal nutrition through the operation of four livestock and poultry feed plants, including a new state-of-the-art feed mill in Moncton. It also belongs to Co-operative Research Farms, an international organization of feed manufacturers that collaborate on livestock and poultry nutrition and management-related research for the benefit of their customers. Co-op Atlantic has formed other alliances to enhance its services to members and their customers. For example, it is a founding member of United Grocers Inc. (UGI), a national procurement organization that represents key retailers across the country.

Co-op Atlantic

MEMBER CO-OPERATIVES

products $150 million, and independent sales $59 million.

The board of directors received the Canadian Co-operative Association’s Governance

Conventional Co-ops 54

Award of Excellence in 2010.

Satellite Co-ops 4 Direct Charge 3 Co-op Food Markets 12 Agricultural Co-ops 10 Country Stores owned by Co-ops 12 Producer Co-ops 5

grocerybusiness.ca

January | February 2013

Congratulations! Canada Bread Company Ltd. is proud to congratulate Co-op Atlantic on 85 years in business and all they have given back to our communities.

facebook.com/bensbakery â&#x20AC;˘ facebook.com/dempsters

Congratulations

Years of outstanding growth and success!

Congratulations to

On your th

anniversary!

January | February 2013

CO-OP Atlantic on your

85th Anniversary

CO-OP ATLANTIC

85YEARS

Besides managing volume rebates from suppliers, UGI co-ordinates national brand promotions, preferred supplier arrangements, and private-label and seasonal procurement and promotions. An innovator in its own right, Co-op Atlantic was the first to establish gas bars – its petroleum operations now supply 41 of its own and three independents – and to introduce reusable cloth shopping bags in the 1990s. It also launched Atlantic Canada’s first Energy store, providing both conventional and alternative-energy choices to member-customers. A leader in social housing, it manages more than 1,700 homes for individuals, seniors and families through its subsidiary Atlantic Peoples’ Housing Ltd. For example, the Tannery Court housing complexes are designed for non-elderly, single adults with life challenges. The subsidiary will also help meet the growing need for co-operatively owned housing solutions for seniors, as the Atlantic region leads Canada in the proportion of its population that is reaching retirement age. The housing sector, like other Co-op Atlantic divisions, has specialists in designing and building housing complexes, and in board governance and management.

ATLANTIC FOOD PRODUCTOF THE YEAR

grocerybusiness.ca

As part of Co-op Atlantic’s commitment to buying local, each year, it and its member-owned stores sponsor the Eat Atlantic Challenge to determine the Food Product of the Year. The goal of the campaign is to raise consumer awareness and appreciation of the world-class food products made in Atlantic Canada. In true Co-op democratic fashion, consumers can cast their vote for their favourite homegrown products at the contest’s website at www.eatatlantic.ca. The top 10 finalists for 2012 ranged from potato chips to cheese, dried cranberries to ice cream. The winner of the “people’s choice” award was the Newfoundland Chocolate Company for its handmade chocolates.

January | February 2013

Dole® Fresh Fruit Company aimerait offrir ses plus sincères félicitations à Coop Atlantique pour ce 85e anniversaire. Dole® Fresh Fruit Company congratulates Co-op Atlantic on their 85th anniversary.

www.dole.com

CO-OP ATLANTIC

85YEARS A few years ago, explains Légère, the board and the executive management team developed a strategic vision for the future, identifying three core areas of business: food, agriculture and energy. “Strategically, there will be some point at which we’ll invest in more, and some will grow and some could shrink,” he says. “As co-ops, we can be quite flexible. We’re trying to service the needs of our members, and the members have different needs.” Seeing the co-op model bring value to members and communities – often in remote areas around the world where those services can’t be provided any other way – is extremely rewarding, says LeBlanc. A 34-year veteran of the company, he has done several stints in communities in the Northwest Territories, Peru and Africa, providing strategic direction on

CO-OP

the Acadian way After working at the Moncton-based head office of Co-op Atlantic in a variety of capacities for several years – most recently as corporate communications officer – Darlene Doucet returned to her hometown of Cheticamp, N.S., in 2010 as executive director of the Conseil Coopératif Acadien de la Nouvelle-Écosse (Co-operative Council of Acadian Nova Scotia). One of many co-operatives that work closely with Co-op Atlantic, the goal of the Council is to promote co-operative development in the francophone and Acadian communities across the province. The Acadians of Cheticamp were early users of the co-op model, having organized a fishery co-operative by 1915. “Traditionally, co-operatives all start out of a need or an idea shared by a few people who are passionate about something,” says Doucet. In Cheticamp, the fishermen were selling their catch in exchange for food, but had no money in their pockets. “When people started to control their finances through their own credit union and were able to purchase food at their own co-operative, that was the economic engine the community needed.” To date, there are 12 co-operatives in this picturesque fishing and tourist village. Doucet grew up talking co-ops around the kitchen table. Her father, Raymond, managed the Cheticamp Co-op for 40 years, growing the volume from $341,000

grocerybusiness.ca

his first year to $12 million upon his retirement. During and since that time, he has been active on the board of a number of other local co-ops, and founded the Council in 1980. “I was always involved in the Co-op system,” he notes. “If you’re a heavy community supporter, it’s an automatic connection that you are also a co-op supporter,” adds Darlene. “The two are connected. If you’re community minded, you tend to be co-op minded.” She emphasizes the importance for co-operatives to keep educating and training. With aging members and a younger generation that is increasingly moving away, co-ops “can never sit on their laurels,” she warns. “I think the co-op model is as relevant today as it was way back when. It’s just that we can’t rely on it remaining the same because the environment, the economic situation is not the same anymore. Right now, the need is jobs.” For Darlene and Raymond Doucet, the co-op model will always remain viable because it gives people the power to control their economy, which is especially significant in rural communities. “The reward is in knowing you are improving the community,” says Raymond. “The Co-op is in my heart, and it will be for as long as I live.” Many around the world would agree.

January | February 2013

CO-OP ATLANTIC

85YEARS

“The co-op model is not for the faint of heart. It requires a lot of faith, a lot of trust. It requires the people who are involved in it to follow the values and principles. But when they’re all put together, they really work.”

Sally Praskey is a contributing editor of Grocery Business and a proud member of the Cheticamp Co-op.

January | February 2013

forming a co-operative. “You could see the results immediately,” he enthuses. “The co-op formula was really benefiting these people.” Like any retailer, Co-op Atlantic and its member-stores have faced challenges over the years. “There’s always a need to grow, and in a shrinking economy, rural areas are under a lot of stress,” says David MacDonald, manager of Cape Breton, N.S.-based Cheticamp Co-op, one of Co-op Atlantic’s largest member-stores. Recruiting and retaining productive employees is an ongoing concern, he adds. Not to mention the struggle to engage increasingly time-starved members in activities and governance. “The co-op model is not for the faint of heart,” warns LeBlanc. “It requires a lot of faith, a lot of trust. It requires the people who are involved in it to follow the values and principles. But when they’re all put together, they really work.” Co-op Atlantic is a case in point. Fresh from celebrating its 85th anniversary, the wholesaler and its members face the future with confidence and pride in their ability to build a better world.

Making it

NATURAL

SELECTION By Noelle Stapinsky

What started as a small B.C.-based supplement company – with just four products and handdrawn flyers – some 23 years ago is now a

state-of-the-art health product manufacturer

that’s garnering international recognition and

snapping up innovative product awards across

“In this industry, you have to love people and want to help them”

Canada. But as president and founder Tom Chin

says, not all business success stories start under the best circumstances.

In the late ’80s, the former financial consultant

—Tom Chin

turned to a friend in the natural health industry when he found out he had a kidney stone. “In

those days, the medical science involved in

removing a kidney stone was not as good as it is today,” says Chin.

His friend recommended a simple drink

concoction made with ingredients found at any

grocery store. “It was made with parsley and

turmeric. He told me to drink it for three days, but in less than a day, I passed the stone,” says Chin.

Intrigued by such simplicity, Chin immediately

was it. I quit my job – everyone thought I’d gone

nuts. I chose four of the best products – one for energy, memory, the heart, and blood pressure

never looked back.”

Vinegar won the same accolade at Grocery

he says. “In the first month, I made $30,000. I’ve Today, Organika Health Products, headquartered

in Richmond, B.C., operates out of three facilities

After researching the financial aspects of the

rites. “It has all-organic ingredients that energize

developed, tested and manufactured on-site, and

shipped to over 22 countries globally.

Most recently, Organika naturally sashayed its

When it comes to choosing what products to

develop, Chin certainly follows his gut. Many of

Organika’s products are inspired by life in general

vinegars. Citing a staggering projection that 540

passionate founder. “Our products come from

2030, Chin says, “People don’t want to change

everything else will fall into place.”

million people are expected to have diabetes by

grocerybusiness.ca

and help clean your liver,” he notes.

and health issues. “In this industry, you have to

supplements at an affordable price. And one

venture, the name Organika came to him. “That

vegetables, including kale, one of Chin’s favou-

way into the food industry, introducing coconut

palm sugar, virgin coconut oil, and coconut

summer day as he was pondering this business

The company’s latest product is Greens, a

microbiological labs to packaging. With about 110

business, Chin set his sights on sharing natural health knowledge and producing natural

Innovations Canada 2012.

powder drink mix that boasts 17 fruits and

employees, more than 450 natural products are

discovered was that products on the market

Showcase West Expo 2012, while its Coconut

totaling 46,000 square feet that house everything

there were a lot of clinical trials being done on

were really expensive.

Organika’s Palm Sugar was voted one of the

Top 10 Most Innovative Products at Grocery

from raw-material production and chemical and

herbal products,” says Chin. But what he also

coconut tree has the lowest glycemic index of 35.”

– and had them made by a local manufacturer,”

started researching the industry. “There is so

much science involved, and even in those days,

sugars. We found that the palm sugar from the

their eating habits. So I decided to look for better

love people and want to help them,” says the

having compassion. Once you have that,

January | February 2013

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 youâ&#x20AC;&#x2122;re here.

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

18-21 MAY, 2013 MCCORMICK PLACE CHICAGO, ILLINOIS

Grocery Innovations Canada

2012 top 10

most Innovative products

Canadian grocers and industry delegates perused hundreds of new products on the Grocery Innovations Canada show floor and cast their vote for the top 10 most innovative products. Evaluated on uniqueness and consumer response, here’s the line-up of products that were voted as being at the forefront of industry innovation.

Buitoni Pizza (Nestlé)

TO Tablex (Tablex)

Arvum Balsamic Cream (La Carrera)

MiO Liquid Water Enhancer (Kraft Foods)

Stock First (Campbell’s)

e6 Energy Strips (Simcoe Asia Group)

Duncan Hines Red Velvet Cake Mix (Acosta Canada) grocerybusiness.ca

BelVita Breakfast Biscuits (Kraft Foods)

Take Home, Bake Fresh Products (Koko Patisserie)

Coconut Nectar Vinegar (Organika)

January | February 2013

Regional

Appetites By Joel Gregoire

While Canadians share much in common, each of the country’s four regions have aspects that are unique, be it cultural, economic or societal. The 15th edition of NPD Group’s Eating Patterns in Canada report examines some of the differences with respect to consumption behaviour. These findings only scratch the surface in identifying different eating habits among the regions. Retailers and food manufacturers should consider Canada’s unique differences when forming product development and communication strategies.

Eating Patterns in Canada Legend

Canada

ontario

quebec

atlantic

500

100

500

100

450

400

350

300

250

200

150

100

Snack Occasions Number of annual snack occasions per capita, by region

west

January | February 2013

Avoid Snacking Attitudes around snacking, per cent, per household

Dessert Number of annual in-home desserts with supper per capita, by region

fresh fruit Number of annual meals per capita that include fresh fruit, by region

Rice Consumption Number of meals per capita that include rice, annually, by region

The Culinary Mosaic Western canada »» An incubator for new trends »» Most dynamic food service industry with the most visits per capita »» A youthful population »» Diverse ethnic makeup

Ontario »» Exerts considerable influence on overall eating trends »» Intense urban environment with lots of food choices »» Culinarily adventurous consumers »» Diverse ethnic population

Quebec »» Healthy eating habits »» Less likely to diet or be overweight »» Fewer meals skipped

Atlantic canada

»» Frequent snacking occasions

»» Aging population »» Interest in making healthy food choices »» Currently consuming fewer fresh fruits and vegetables per capita

100

500

100

450

400

350

300

250

200

150

100

Meal Skipping Number of annual skipped meals per capita, by region

Annual Foodservice Visits per capita

More Fibre Per cent of households, by region, that are trying to eat more fibre

Salt/Sodium Per cent of households, by region, that are cautious about the amount of salt/ sodium in their diets

Joel Gregoire is a foodservice industry analyst for The NPD Group, a leading provider of comprehensive consumer and retail information.

Sources: The NPD Group/HealthTrack – Canada; 3 years ending March 2012, The NPD Group/CREST – Canada; year ending May 2012 The NPD Group/National Eating Trends - 3 Years Ending March 2012

grocerybusiness.ca

January | February 2013

The

Golden Pencil awards 01

January | February 2013 09

November 19, 2012, Toronto, Ont:

The prestigious Golden Pencil Award was presented to Les Mann of Walmart Canada, and to Paul Higgins, Jr. and Michael Higgins, both of Mother Parkers Tea and Coffee.

01 Paul Higgins Jr., Mother Parkers; Peter Singer, Thomas, Large & Singer 02 Michael Higgins, Mother Parkers; Peter Singer; Tony Morrison, Acosta Canada (Retired) 03 Les Mann, Walmart Canada; Peter Singer, Shelley Broader, Walmart Canada 04 Ali Davies, Kraft Foods 05 Cheryl Smith and Roger McVety, Parmalat Canada 06 Geoffrey Wilson, Loblaw Companies 07 Ward Hanlon, CFIG; Steve Sharpe, Sharpe’s Food Market 08 Todd Kelly and Scott MacLaughlin, Clorox 09 Michael Marinangeli, MIDEB Consulting; Sam Ajmera, FGF Brands; Eric La Flèche, Metro Inc. 10 Dan Lafrance, Kraft Foods; Jeff David, Mondelez International; Marc Lynch, ConAgra; Stacey Kravitz, Kraft Foods; Craig Vendramin, Kraft Foods

11 Doug Cussons, DGC; Paul Cussons, Advantage 12 Marc Guay, PepsiCo; Anthony Longo, Longo’s; Darryl Rowe, McCain Foods 13 François Bouchard, The Country Grocer; Brian Parker, DCI 14 Chris Powell, Tree of Life

11 12

grocerybusiness.ca

January | February 2013

list it

New products you need to know about

New Cup on the Block Melittaâ&#x20AC;&#x2122;s new Single Serve cups come in six rich, full blends made from 100 per cent Arabica beans grown at high altitudes. This new line features Premium Dark Roast, European Deluxe and Traditional, and Fairtrade 100 per cent Columbian, Costa Rican and Guatemalan blends. Designed with 40 per cent less plastic, these cups fit the Keurig Incorporated brewing system. melitta.ca

Del Monte

No Salt Added Vegetables Enjoy the delicious taste of Del Monte Vegetables with no added salt. Canadians are becoming increasingly concerned about sodium content in their diets. Del Monte No Salt Added Vegetables gives consumers control over how much salt to add, if at all. Consumers voted Del Monte No Salt Added Vegetables the winner of the 2012 Canadian Living Best New Product Awards! delmontecanada.com

January | February 2013

Spritz, Spritz A new line of olive oil sprays, by La Maison OrphĂŠe*, features five flavours â&#x20AC;&#x201C; extra virgin olive oil with basil, extra virgin olive oil with chili, extra virgin olive oil with garlic, organic balsamic vinegar and white balsamic vinegar. *Selected as a finalist in the Trends and Innovation category at 2012 SIAL Montreal maisonorphee.com

Astro Original Greek, now in a new size Thick and deliciously creamy, Astro Original Greek Fat Free yogourt is now available in a 4 x 100g multipack; a perfect snack for any time of day. Made with natural ingredients, Astro Original Greek is high in protein, an excellent source of calcium and is gelatin-free. astro.ca

Introducing the ONLY Greek Drinkable Yogourt Astro Original Greek drinkable yogourt delivers the same benefits and same great taste of Greek yogourt, perfect for on-the-go. With 12g of protein per 200 ml serving, Astro Original Greek drinkable yogourt contains natural ingredients and is deliciously creamy. astro.ca

grocerybusiness.ca

January | February 2013

it figures >

Shopping

for Value Within the first three quarters of 2012, prices on staple breakfast foods increased noticeably Average Retail Price Increase

7% Eggs 3% Yogourt 3% Milk 3% Bread 2% Cereal

33% Instant Breakfast Unit Increase

Takeaway As prices increase, and to manage costs, some consumers may opt to purchase more pre-made breakfasts instead of individual ingredients. Manufacturers and retailers should highlight these products and how they meet consumersâ&#x20AC;&#x2122; needs for convenience and speed.

31% 72

January | February 2013

Cooking wraps, bags and paper had a 31% increase, followed by a 26% increase in non-disposable cutlery Takeaway The rising price of food has consumers increasingly concerned with their spending, and these categories have witnessed growth as consumers eat at home and pack their lunches more often. Manufacturers and retailers can appeal to consumersâ&#x20AC;&#x2122; interest in bagged lunches by highlighting items that can be easily packed. Also, cross-promote items by creating grouped displays that engage your consumer with new ideas for exciting lunches.

44%

of Canadians agree that price is the most important factor when buying food or beverages

Takeaway Although theyâ&#x20AC;&#x2122;re still price conscious, consumers say they are willing to pay more in return for a strong benefit. For the timepressed consumer, cross-promote convenient and complementary breakfast items in-store.

The impact of cross-border shopping Takeaway Canadians love a good deal and theyâ&#x20AC;&#x2122;re willing to travel to take advantage of better selections. Canadian manufacturers and retailers should emphasize the factors of convenience and proximity to encourage consumers to shop locally.

20%

increase in trips across the border to U.S. retailers

10%

more money spent

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.

all stats courtesy: N ielsen

grocerybusiness.ca

Carman Allison

January | February 2013

Perry’s Point of View

Rents, REITs

and Risks...

Can real estate dictate the value of a retailer? The recent announcement by Loblaw Companies Ltd. that it would be spinning out the majority of its real estate into a Real Estate Investment Trust (REIT), is an acknowledgement that investors are willing to pay far more for real estate than for grocery stores. To some extent that makes sense – borrowing costs are low, and a diversified REIT produces plenty of cash almost in spite of its tenants, the stores. Stores are generally locked into long-term rent payments reflecting a premium to the carrying cost of the property. What’s left over is a steady stream of monthly distributions. The valuation gap between stores and real estate is remarkable. When we look at classic measurements such as EV/EBITDA, (which is the total debt plus market capitalization of a company, divided by its EBITDA), grocery stores are lucky to be valued by investors at anything over six times. Loblaw’s core operation, prior to the REIT transaction, was probably being valued at between three times and four times. By contrast, REITs trade for 12-to-13 times EBITDA. This means that a company can take the same real estate operating profit (rents less costs) and transfer it into a vehicle that will value those profits three or four times higher. If the company maintains a meaningful ownership of the REIT, it just improved its asset value substantially. Even though the

January | February 2013

new-found rent expense in the operating company reduces EBITDA, that loss in market value is easily surpassed by the valuation placed on the rent stream into the REIT. Empire Company was the first to utilize this structure by having rent-paying Sobeys properties in its 42.5 per cent-owned Crombie REIT. Transferring the rent to a higher-valued vehicle raises the value of Empire. All this is generally great for shareholders, and a higher share price gives a retailer more flexibility to raise growth capital and even attract talent. But if this is so easy, what are the pitfalls? If a company can raise its value by jamming rents into a REIT, the REIT (and thus the company) benefits by getting higher rent payments from stores. A large portion of Canadian supermarkets are operated by franchisees or dealers who pay rent to the franchisor. Whereas before, the franchisor cared about the franchisee paying a reasonable rent, and could occasionally give a rent break to a struggling operator, those days may be over. It is now in the franchisor’s best interest to have the franchisee pay high and growing rent – at the very least some version of market value – into the REIT. The franchisor may have to assist the franchisee in other areas to offset a potentially higher rent charge, but the rent payment

becomes the most important component of the relationship. Even for corporate stores, locking a store into a market rent may result in lower contribution to fixed costs, and may prevent or delay renovation work when it is needed, or cause cutbacks in labour to make sure the store seems profitable. In a world where real estate values can dictate the value of a retailer, the temptation is great to collect into the REIT, high and increasing rent payments, possibly to the detriment of the individual store. The challenge for retailers with ownership positions in REITs is to balance the need to enrich the REIT with the need to maintain a vibrant, competitive base of stores and franchisees.

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.

SOLD OVER ONE MILLION BREWERS IN CANADA* *Source: NPD Group 2007-2012

Consumers demand, on demand I want my favourite beverage variety when I want it

I want the perfect cup of coffee when I want it

I want my favourite brand when I want it

How does the system work? The brewer reads the exact brewing instructions from a bar code, creating the perfect beverage every time.

Total On Demand Category Brewer Sales 2012†

+1 Million units

2011†

598,000 units

†NPD GROUP – SINGLE SERVE BREWERS – UNIT VOLUME – AS AT NOVEMBER 2012 AND FY 2011

Coffee Category Dollar Growth 2009 to 2012*

Tassimo has sold 1 million brewers in Canada >

Top 5 selling coffee SKUs in on demand are Tassimo

Soluble

108

Tassimo now offers Tim Hortons ®, Second Cup®, Tetley® and President’s Choice® varieties

45 20 130

On Demand accounts for nearly 35% of the coffee category, and continues to drive growth and profitability *

250

Roast & Ground

Millions $

On Demand

153

150

147

455

489

559

540

2009

2010

2011

2012

* AC Nielsen TL R&G / On-Demand Coffee, 2009/2011; 2012 is a projection based on 3 quarters of actual data This presentation contains forward-looking projections on the growth of on-demand sales in Canada. These projections involve risks and uncertainties that could cause actual results to differ materially, and as such we make no express or implied representations that these results will be achieved. ® TIM HORTONS IS A REGISTERED TRADE MARK OF THE TDL MARKS CORPORATION IN CANADA AND TIM HORTONS USA INC. IN THE U.S. ®TIM HORTONS EST UNE MARQUE DÉPOSÉE DE LES MARQUES DE TDL CORPORATION, AU CANADA, ET TIM HORTONS USA INC., AUX É.-U. ®/ TM Trademark of The Second Cup Ltd. MD/MC Marque de commerce de The Second Cup Ltd. ®REGISTERED TRADEMARK USED UNDER LICENSE FOR/®MARQUE DÉPOSÉE UTILISÉE SOUS LICENCE POUR: TATA GLOBAL BEVERAGES CANADA INC., ETOBICOKE, CANADA M9W 6L2 ®TM/MC REGISTERED TRADEMARKS OF LOBLAWS INC. USED WITH PERMISSION./MARQUES DE COMMERCE DE LOBLAWS INC./UTLISÉES AVEC PERMISION.

Brewer & T DISC Seasonality There are 3 key seasons for Brewer sales:

Motherâ&#x20AC;&#x2122;s Day

Merchandising tip: High sales of brewers around Mother's Day can lead to T DISC out of stocks, so be sure to stock up!

Back-toSchool

Festive

New for 2013

Brew Over Ice for On-Demand Refreshment Black Iced Coffee features the smooth, robust flavour of Nabob coffee expertly crafted to be brewed over ice.

Grab a cold glass of refreshment with our sweet blend of black tea and ripe peach flavour.

Our black iced tea is sweetened to perfection, making it summerâ&#x20AC;&#x2122;s coolest treat.