September October 2013 Vol 3 | No 5 $9.95
Pete Luckett THE BRAND
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People • Products • Promotion • Passion
Meet the Grocery Business
September | October, 2013 Volume 3, Number 5
grocerybusiness.ca
editorial advisory board
Co-Publisher and Executive Editor Karen James 416-561-4744 KarenJames@grocerybusiness.ca Co-Publisher and Content Director Kevin Smith 416-569-5005 KevinSmith@grocerybusiness.ca Executive Vice-President Content and Market Development Dan Bordun 416-817-5278 DanBordun@grocerybusiness.ca
Mark Ayer Procter & Gamble Inc.
Tim Berman Tom Barlow Kraft Foods Canada Canadian Federation of Independent Grocers
Nancy Croitoru Food and Consumer Products of Canada
Phil Donne Campbell Company of Canada
Cori Bonina Stong’s Market
Perry Caicco CIBC World Markets
Contributing Editors and Writers Sally Praskey, Angela Kryhul, Noelle Stapinsky, Lauren Kramer, Peter Diekmeyer Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca
© Copyright 2013. All rights reserved. No part of this magazine may be reproduced without written permission of the publisher. GST Registration No. 83032 6807 RT0001 Publications Mail Agreement No. PM42211029 ISSN 1927-243X Grocery Business Media 390 Queen’s Quay W., RPO Box 40085 Toronto, ON M5V 0A4
Michael Cheryl Smith Marinangeli Parmalat Canada MIDEB Consulting Inc.
Chris Terrio CROSSMARK Canada Inc.
The faces you see, above, are familiar to many in our industry. As members of our Editorial Advisory Board, they act as an ongoing resource to the Grocery Business team – guiding us on everything from industry trends to editorial direction. We want to acknowledge their hard work and to express our appreciation to all of our current Board members (as well as to past members, John Scott and Bill Dunne), for the valuable contributions they’ve made to our ongoing success. Karen James and Kevin Smith, Co-Publishers
karenjames@grocerybusiness.ca kevinsmith@grocerybusiness.ca grocerybusiness.ca Follow us on Twitter @grocerybusiness
David Wilkes Retail Council of Canada
Grocery Business September | October, 2013 Volume 3, Number 5
contents
Provigo Le Marché, Kirkland, Quebec
Departments 5 Meet the Grocery Business
58 Launch It, List It
8 Front End
65 Perry’s Point of View
Editorial Advisory Board
People & News
10 2 013 Spirit of the
Independent Award
11 Open Mike
Ad matching: Love it or hate it?
43 It Figures
Winning the shopper of the future
“Be first, best, or different. That is the key to any business.” Pete Luckett
New and Now Products Survivor: Grocery Store
on the cover
20 From Vegetables to Vineyards
Pete Luckett applies his produce-marketing expertise to wine marketing
26
20
45
features 15 Provigo Le Marché Debuts
57 IPSOS: Retail Recognition for New Products
17 C-Suite: Denis Gendron, UGI Inc.
Reasons to debut new products at retail
19 The Bright Side of the
61 Eau Canada
34 BrandSpark: Mobile Personas
66 Grocery Innovations Canada
Interchange Fees Ruling
35 An APPetite for Grocery Delivery 36 Advantage Group
Retailers Rate Suppliers
47 Colemans Watermelon Promotion
52 Produce Marketing
Association: Fresh for the Future
Maple water makes a splash
2013 Program Agenda
26 Independents’ Day
40 All Night Long
26 Sharpe’s Food Market Celebrating 50 years
30 National Grocers Association 2012 Financial Survey
41 East Meets West
28 Competitive Edge Why independents are thriving today
32 Steeped in Tradition Lakeview Grocery, New Orleans, Louisiana
T&T’s annual Night Market
PriceSmart caters to evolving tastes
grocerybusiness.ca
September | October 2013
7
Front End
Grocery People Metro Inc. recently named Joe Fusco to the position of senior vice-president, Conventional Merchandising, Store Concept Development & Pharmacy. Fusco also has full merchandising and operational responsibility for the store concept development initiatives. Paul Bravi is the new vicepresident, Discount Merchandising. Bravi previously held the position of vice-president, Grocery Merchandising for Metro Richelieu Inc. Cory St. Martin, CPA, CA, has joined CROSSMARK Canada as director of finance. Most recently, St. Martin was associate vice-president of finance at Sears Canada. Ken Kwong is the new vice-president of sales and marketing for Vancouver-based New Age Marketing & Brand Management. Kwong has held account and brand manager positions with Whitefish Group, Tree of Life Canada and National Importers in the U.S.
8
September | October 2013
Hashim Rizvi joins the Best New Product Awards team as director of sales. In his previous role, Rizvi was manager, Product of the Year Canada. Gordon Bingham has been promoted to the position of president, Ipsos ASI in Canada. Since joining Ipsos ASI in 1997, Bingham has spent much of his time leading client service teams. Davide Viola is the new Category Marketing Director (Sr.), Prepared Meats Division, at Maple Leaf Consumer Foods, with marketing ownership of the Schneider’s master brand. Viola was most recently a director at Loblaw Companies Ltd., leading the PC Insider’s Report, and the PC Brand. The Alberta Livestock and Meat Agency has appointed John Scott to its board. An economist by profession, Scott was president and CEO of the Canadian Federation of Independent Grocers from 1991 to 2013.
Aztec acquired by IRI By Sally Praskey Information Resources Inc. (IRI), a U.S.-based global provider of information and shopper marketing solutions to consumer packaged goods, retail, and over-the-counter healthcare companies, has acquired Aztec, an innovator of market measurement and related services serving similar markets from locations in Canada and other countries. The acquisition marks IRI’s entry to the Canadian market. Aztec’s clients will secure access to IRI’s sophisticated suite of advanced analytics, consumer and shopper marketing and consulting services, as well as its non-scan (consumer panel) data. “We have a number of complementary capabilities that we’re going to be working to build into our collective offerings to strengthen the consumer packaged goods and retail offerings we provide,” says John McIndoe, IRI’s senior vice-president of marketing. “This underscores IRI’s ongoing commitment to expanding its geographic footprint and our capabilities to meet our multi-country clients’ evolving research needs.” Aztec will maintain its current operations in Canada, where it has offices in Toronto, Vancouver, and Calgary.
Front End
Retail Council of Canada – appointments
Sharon Armstrong joins RCC
Karl Littler takes on the position
Nathalie St-Pierre, in addition
Lisa Mina joins RCC as director,
as senior vice-president,
of vice-president, provincial
to her role in directing the
health & wellness and industry
marketing and communications.
government relations and
association’s work in Quebec,
relations. A registered dietician,
A senior association management
strategic issues. Littler has
has taken on new responsibility
Mina’s recent experience includes
executive with more than 25
worked as a senior member of
and will play a leadership role
working with PepsiCo Canada on
years of experience in all facets
RCC staff on issues of importance
in RCC’s sustainability files
nutrition science and regulatory
of marketing, Armstrong comes
to the retail and grocery indus-
with a particular emphasis on
affairs issues.
from Certified Management
tries. During his career, Littler
environmental stewardship.
Accountants of Ontario where
also served in the Office of the
she was vice-president business
Prime Minister as deputy chief of
development and was responsible for
staff with responsibility for Cabinet
repositioning the association brand.
operations and legislation.
Buy Low Foods raises $65,000 for Variety B.C. The 17th annual Buy-Low Golf Classic not only drew 288 golfers for a day of networking and fun, the event raised $65,000 for Variety – The Children’s Charity. Held July 24, 2013 at the Northview Golf & Country Club in Surrey, B.C., the invitation-only golf classic is one of Buy-Low’s largest fundraisers. Pictured (l-r): Bill Senghera (Variety 1st vice-president), George Pitman (Variety board member and chair, Variety Market & Auction), Dan Bregg (president, Buy-Low Foods), Barbara Stewart (chair, Gold Hearts program & Variety International President’s Council), Atanu Dalal (director of finance, Buy-Low Foods), Bernice Scholten (Variety executive director).
grocerybusiness.ca
Tree of Life Acquires Northbud Distributors Tree of Life Canada (TOLC) has acquired Northbud Distributors, a Canadian food distribution and brokerage business. TOLC said the deal dramatically increases its frozen and refrigerated capabilities for retail, as well as its food service products. Northbud Distributors will be merged into the TOLC business over the next 12 months. All Northbud trade programs and terms will remain in place during this transition. Peter Clarke, vice-president, sales and marketing for Northbud, joins TOLC as the vice-president and general manager, Northbud.
September | October 2013
9
Awards
John Scott recognized with
Spirit of the Independent Award 2013 from the Canadian Federation of Independent Grocers
John Scott is the past president and CEO of CFIG, a post he assumed in 1991 after a decade of running his own economic consulting firm. As the head of CFIG, he oversaw numerous programs and initiatives that foster community among independent grocers, equipping and enabling independent, franchised and specialty grocers for sustainable success. An economist by profession, Scott managed his own firm, Scott & Fenrich Consultants Incorporated, prior to joining CFIG. Throughout his career, Scott has remained involved in a number of industry and government initiatives, including his
10
September | October 2013
current position as chairman of the board at the Vineland Research and Innovation Centre. In 2013, Scott retired as CFIG president and CEO. The Spirit of the Independent Award is given to individuals who have made a significant contribution to the growth of the entrepreneurial spirit and provided exceptional inspiration to Canada’s independent grocers. The Luncheon of Honour will be held at Grocery Innovations Canada on Monday, September 30, 2013 in Toronto.
Open Mike
Ad matching:
Love it or hate it? By Michael Marinangeli
In the late 1980s, the biggest competitive threat in Ontario was the launch of Loblaw’s Supercentres. After several successful years running the Real Canadian Superstores in Western Canada, Loblaw was introducing an eastern version.
Miracle Mart, where I worked at the time, had just launched its own combination stores, called Ultra Mart. These had a broad assortment of grocery, HBA, and non-food, as well as a pharmacy and great perishable departments. We needed to determine if our program could stand up to the Supercentres. It was decided that a group of us would visit Real Canadian Superstores in Winnipeg and Edmonton, and use this knowledge to develop our defence. The stores were massive. There was no grocery shelving; products were merchandised on skids. There was far more general merchandise than I had seen before. As the only discounter in the market (Walmart arrived a few years later, in 1994, when it acquired Woolco), Supercentres had the discount space to themselves. They were the price leader in the market, and everyone else benchmarked themselves against them. Three things immediately caught my eye: • M any of the staff wore roller skates; it was part of the aura of the large store.
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• A “price checker” van parked outside the front door reinforced the fact that they monitored the market to ensure they were the cheapest. • Their policy of “ad matching” was loud and clear in their ads and on their store signage. In fact, they posted their competitors’ ads, drew a line through their price points, and undercut them by a penny. When I returned, I told my boss we would experience some short-term pain because of the square-footage growth and price noise the Supercentres would create, but the ad match program would not work in our market for the following reasons: • At the time, staples such as bread, milk, eggs and butter were not being featured in anyone’s ad in the West. In Ontario, however, it was a common occurrence – stores often sold milk $1 a bag below cost – that would immediately change the grocery margin structure for the Supercentres.
September | October 2013
11
Open Mike
• T he ads in Ontario were much hotter than those in the West. Ad matching would be much more costly here. • T here were more competitors to ad match against in Ontario. • O ntario already had the highest level of discount in Canada. True discounters like Valdi were already 20- to 30 per cent cheaper than conventional stores. No Frills was starting to expand as well. Supercentres would not have the discount arena to themselves as they did in the West. So why am I telling you all this? Sometimes you have to study the past to understand the present and predict the future. The Supercentres did come to Ontario in the late 1980s and did not experience the same level of success as out West. Ad matching was far more difficult to manage and sustain in a lower-margin, more competitive market. Now, here we are in 2013 and ad matching is alive and growing as discounters gain a bigger share of the pie. Walmart, Target, Freshco, No Frills and Superstore are all using this pricing tactic. They will match the advertised price of any major competitor in their trading area. This has become a very expensive ploy with no real competitive advantage, since they are all doing it. After years of absence, staple feature pricing has again reared its ugly head and is appearing on the front-page ads of discounters and conventional stores as well. As the market continues to heat up, the cost of this program will reach astronomical heights before somebody cries uncle.
Michael Marinangeli is a principal at MIDEB Consulting Inc. and a retailing veteran with more than 40 years of experience. mjmarinangeli@gmail.com
grocerybusiness.ca
10 reasons why ad matching is a bad strategy 1. I t slows productivity at the front end of the store while the cashier checks the ads or receipt to verify that the items match and the customer is eligible for the price point.
7. Pressure will mount on the supplier community to help fund the ad matching. Retailers have to be diligent that monies aren’t being diverted from other programs to cover these costs.
2. If there is disagreement on whether the product is eligible, the manager may have to provide a ruling. Again, this is disruptive and could result in a very disgruntled customer, which defeats the whole rationale of ad matching.
8. Ad matching is beneficial only when few players are doing it. Once it reaches a critical mass as it has in Ontario, there is only one true winner – the consumer.
3. Matching everyone’s program disrupts the supply chain, resulting in out of stocks. No order writer can predict inventory levels when demand is created on so many fronts. 4. It exposes your high regular retails to competitors’ feature prices. It can erode your price image if you have high shelf prices, and reinforces the customer’s belief to never buy anything at regular price. 5. It is difficult for cashiers to compare products in the perishable departments, since the size, quality and grades may be significantly different. 6. Many discounters are part of a chain that owns conventional stores as well. As conventional stores struggle to reinvent their value propositions against the discounters, and heat up the front pages of their flyers, the ad matching becomes more lucrative for the consumer and more expensive for the discounter.
9. If true discounters, like Aldi, come to the market, how do you ad match after you have to adjust your shelf prices downward to compete with them? 10. When the consumer has access to everyone’s feature prices under one roof, the value proposition of a retailer’s private brands erodes significantly and their share will deteriorate. I have mixed feelings about ad matching. As a consumer, I am a big winner. It is easy to chop my grocery bill each week in half, and I do. As a retailer, I hate it. It is a recipe for disaster. It will end when the cost becomes prohibitive with no discernible competitive advantage. Until then, shoppers will pile up the savings.
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Profile
Loblaw opens first Provigo Le Marché outlet Not long ago, Loblaw Cos. Ltd. quietly removed the Loblaws sign at its 86,000 sq.ft. Kirkland store – located just outside of Montreal – and replaced it with a Provigo Le Marché banner. By Peter Diekmeyer
Kirkland, Que. – The conversion of six additional Quebec stores to the new Provigo Le Marché brand, including a newly built Sherbrooke outlet, signals an important strategy change in Canada’s largest francophone market. “The Provigo brand has been around for more than 40 years and Quebecers have grown to love it,” says Pierre Dandoy, Loblaws’ senior vice-president, operations, conventional division. “We’d be crazy not to take advantage of that.” By year-end, a total of seven stores will carry the new banner, which, Dandoy says, will offer shoppers expanded services and additional store personnel. The company also plans to clear away the clutter of merchandise usually seen at a typical grocery store checkout area to help speed traffic. The number of staff in the new Kirkland outlet is increasing to 300 employees from 200 previously. The produce section, which was already a major priority for the food retailer, has been expanded by 20 per cent as an answer to stiff competition from Walmart and others in dry goods offerings. Loblaw operates 400 outlets in Quebec under 11 different banners including Provigo (78), Loblaws (31), and Maxi (111). However, the company has had considerable challenges optimizing those assets. When Loblaw acquired the Provigo outlets in 1998 for $1.6 billion, it was forced to write-off $800 million of the acquisition cost in 2006.
grocerybusiness.ca
Also, Quebecers never really took to the venerable Loblaws banner, which the company put on 32 locations, nor to the President’s Choice brand. Businesses need to be particularly diligent when tackling the Quebec market, says Alda Pavao, a portfolio manager at Addenda Capital. “It’s a tough market, particularly in food. Quebecers are choosy about what they eat and place more emphasis on the dining experience than consumers in the rest of Canada.” Pavao notes that approach and product mix in the Provigo Le Marché Kirkland store are similar to Loblaw’s flagship Maple Leaf Gardens store in Toronto and its City Market location in Vancouver. “The increased focus on fresh offerings such as cheeses, meats, ready-to-serve and produce provides a promising avenue,” says Pavao. “Grocers are facing considerable competition from other channels and new players such as Target are under pressure to react.”
At the opening of the Provigo Le Marché store in Kirkland, Que. (l-r): Kirkland mayor John W. Meaney; Pierre Dandoy, senior vice-president, operations; Danny Leblanc, store manager; Diane Monssen, district manager; André Fortier, senior vice-president (operations).
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For more information, contact Gilles M-Deschênes at Dairy Farmers of Canada Gilles.deschenes@dfc-plc.ca | 1 800 361-4632
Retail RECOGNITION New research shows that retail is a highly influential place to introduce new products to Canadians By Catherine Yuile
discovering new brands
CHANNEL NEWS
6in10 Canadians find out about new brands & products at retail stores, one of the top sources of awareness
TV ads
62%
Internet
62%
Retail Stores
59%
Family & Friends
58%
Magazine ads
35%
Social Networking
29%
Men
62%
51%
Direct mail
26%
Email Newsletters
23%
I like to try new products
38%
i always buy something i had not planned to
50%
36%
grocery shopping is an enjoyable part of my life
31%
22%
I often feel overwhelmed by the number of choices at the shelf
Women are more likely to find out about new brands and products from family and friends. Men
64%
51%
grocerybusiness.ca
42%
41%
LATIN AMERICA
EUROPE
38%
CANADA
U.S.
ASIA PACIFIC
Canadians are more likely to find out about new brands and products in retail stores versus other regions such as the United States and Latin America.
the generation gap Younger consumers find out about new products online, while older consumers look to traditional channels
62%
Women
50%
Entertainment 28%
Women are more likely to buy on impulse and TO enjoy grocery shopping Women
59%
family and friends
AGE
<35
35-49
>50
75%
61% 47%
internet
44% 29% 13%
social networking
15% 12% 3%
blogs
54% 62% 71%
television ads
16%
direct mail
28%
37%
What does this latest data suggest? Retailers and manufacturers need to continue to innovate their communications both in-store and online, while maintaining a strong television presence in order to effectively reach out to Canadian consumers.
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 ASIâ&#x20AC;&#x2122;s global expert on ad transferability across borders.
September | October 2013
17
RATEGICLEA DERSHIPSTRA TEGICLEADE RSHIPSTRATE GICLEADERS STRATEGIC LEADERSHIP YOGOURT
C
anadians are looking for great tasting products that are healthy, all natural and better for you which is why consumers continue to turn to the dairy case for healthy alter-
natives such as yogourt. Yogourtâ&#x20AC;&#x2122;s healthy attributes and added benefits such as calcium, vitamin D, Omega 3 and protein are reasons consumers turn to yogourt as a healthy snack. Plain yogourt is also being used as a substitute or healthy alternative to mayonnaise, sour cream and as an ingredient in cooking and baking.
MARKET FACTS > Yogourt continues to be a dynamic and growing category at retail, valued at $1.3 billion. Yogourt in tubs continues to be the dominant segment - making up 83% of the total dollars.
TOTAL YOGOURT IN TUBS BY SEGMENT
> Within total yogourt in tubs, weight management and functional make up 51% of the total yogourt segment, with the growth in yogourt being driven by the Natural/Organic/Greek segment.
Total Natural/Organic/ Greek Yogourt in Tubs 38.3% (42%) $431,829,000
Total All Other Yogourt in Tubs 0.2% (-62%) $2,518,000
Total Weight Management Yogourt in Tubs 22.7% (-3%) $256,132,000
This is in line with consumer demand for all natural products with no additives, preservatives or artificial colours and flavours. > The drinkable yogourt segment, which is the second-biggest segment in the yogourt category, accounts for 11.4% dollar share or $154 million dollars.
Total Taste Yogourt in Tubs 10.8% (-0%) $122,114,000
Source: Nielsen National GB+MM+DRUG L52 weeks ending June 1, 2013
STRATEGIC LEADERSHIP
Total Functional Yogourt in Tubs 28.0% (-0%) $315,766,000
GREEK YOGOURT GROWTH CONTINUES
Greek yogourt, which now represents a 23% dollar share within the yogourt in tubs segment, continues to experience strong growth versus a year ago. Consumers are drawn to Greek yogourt for its: TASTE: Consumers love the thick and creamy taste of Greek yogourt. It is a true indulgence. NUTRITION: Delivers 2x more protein than regular yogourt.
TOTAL NATURAL/ORGANIC/GREEK YOGOURT IN TUBS SEGMENT Total Greek Yogourt in Tubs 22.6% (98%) $255,487,000
Total Natural Yogourt in Tubs 12.6% (5%) $141,804,000
Total Organic Yogourt in Tubs 3.1% (-15%) $34,538,000 Source: Nielsen National GB+MM+DRUG L52 weeks ending June 1, 2013
Yogourt as an Ingredient
â&#x20AC;&#x153;
Plain yogourt is paramount in the kitchen. With more home cooks looking for healthier and more nutritious options for the family, yogourt has come into the spotlight as a substitute for high-fat ingredients. Yogourt is a particularly healthful ingredient, and the diversity of fat levels means that there are a wide variety of choices to meet nutritional needs at every stage of life. The fat levels of yogourt impact the tanginess, consistency and richness of a finished dish. Different recipes will require different fat percentages in order for a particular recipe or dish to be made successfully.
â&#x20AC;?
-Amanda Riva, Professional Recipe Developer and Owner of The Hot Plate (www.thehotplate.com)
For recipe ideas, visit www.astro.ca
MERCHANDISING TIPS > Consumers shop across various segments within yogourt. Therefore it is important to maintain shelf space on key consumer yogourt segments, including Weight Management, Functional, Natural, Organic, Greek, Traditional Taste, Kids and Drinkable Yogourt. > Maintain proper product assortment such as SKUs with unique functional benefits and claims, innovative flavours, and convenient formats contributing to incremental category sales and profits. > Ensure space allocated to each segment (i.e. all natural/organic/Greek) is in proportion to sales velocity.
STRATEGIC LEADERSHIP
The bright side
of the interchange fees ruling
By Karl Littler
The Competition Tribunal of Canada’s July 22, 2013 ruling on the price maintenance case may prove in hindsight to be the moment at which the trend of increasing interchange fees was arrested. What does this ruling, in an arcane area of competition law, mean for the grocery industry?
On the surface, Visa and Mastercard mounted a successful defence against the action brought by the Commissioner of Competition. The Commissioner’s case was dismissed, allowing the networks to continue to include “honour all cards” and “no-surcharging” rules in merchant contracts. The Tribunal found that the technical legal requirements of the Competition Act’s price maintenance provision had not been met, as it applies only to circumstances involving a resale, which is not the case with interchange fees. A deeper reading, however, suggests that the ruling will be beneficial for the retail industry. The Tribunal praised the Commissioner for bringing the case and its analysis found that the credit card networks’ rules do have an adverse effect on competition. Recognizing that a problem exists is of course the first step in addressing it. But the Tribunal went further, noting that the proper solution to the concerns raised by the Commissioner is a regulatory framework. In doing so, the Tribunal pointed the finger directly at the federal government and at Finance Minister Jim Flaherty in particular. It should be noted that the Commissioner has
grocerybusiness.ca
until the end of September to choose whether to appeal the ruling, and that the Tribunal has issued only a summary decision at this point. Those caveats being noted, all of the key players – government, retailers, consumer groups, card networks and issuing banks – are now readying themselves for a second round in which the potential for regulation is back on the table. Since grocers and our partners in the Retail Council of Canada began this fight in 2009, we have led the retail industry in calling for regulation of runaway interchange fees. At the outset, this view was seen as a radical one. Australia had gone the route of capping interchange fees, but Europe and North America had resisted doing so. Four years later and the balance has shifted. In 2011, the U.S. Federal Reserve moved in to cap debit card interchange fees. This summer, the European Union announced a cap on interchange fees both on debit and credit. This proposal applies to cross-border transactions immediately and could, in two years’ time, apply to domestic transactions in the 28 member nations of the EU.
Far from being a radical solution, our position on fee regulation is increasingly the course being followed by governments in the major western economies. Policymakers have recognized that interchange fees are unacceptably high and are addressing the problem head-on, capping the amounts that the card networks can charge. Similar rules in Canada won’t be achieved overnight. But the message to the Canadian government is clear. The finance minister now has compelling evidence from the Competition Commissioner on the adverse effects of credit networks practices’, and a statement from the Competition Tribunal that a regulatory solution is called for. The Minister need only look to Canada’s economic peers for strong examples of the right policy solution. That’s the bright side of the July 22 ruling and one that promises to be brighter still as grocers and retailers continue the fight for fairness. KARL LITTLER is Vice-President, provincial government relations and strategic issues for the Retail Council of Canada
September | October 2013
19
Pete LucketT
Luckett had an authentic and working British telephone box installed in his vineyard
From
vegetables to O
vineyards ~
n a typical day at Luckett Vineyards near Wolfville, N.S., owner Pete Luckett is busy tending his gardens, all the while chatting with visitors and posing for photographs. A hands-on approach and the ability to make every customer feel special has been Luckett’s recipe for success going as far back as his days as a 14-year-old entrepreneur working the outdoor market stalls in Nottingham, England. After moving to Nova Scotia and growing Pete’s Frootique into a thriving retail and wholesale enterprise specializing in fresh produce, Luckett has turned his considerable talents to cultivating his namesake winery. “This is my new baby,” he says. “We’re building a new
by Sally Praskey
culture, a new business. That’s the same way that I built the Pete’s brand.” The winery evolved gradually, starting with the purchase in 2000 of a 97-acre farm overlooking the fertile Gaspereau Valley. Luckett’s foray into agriculture began with the planting of a variety of fruits. A few years later, taking note of the burgeoning wine industry in Nova Scotia, he experimented with planting some grapes. “And the next minute, I’ve got a flippin’ winery,” he jokes in his clipped British accent. Luckett Vineyards now produces 8,000 cases of wine annually. The transition from retailer to grower was not an easy one, he admits. “There were two transitions at this point in my life that were both huge. Number one was the passing of the reins [of Pete’s Frootique] to my COO
September | October 2013
21
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From
Dianne [Hamilton], and empowering her with total responsibility for daily operations. The other one was the giant learning curve to becoming a farmer – to know what it takes to grow product.” Marketing those products is another challenge, but one at which Luckett excels. “I have about 45 years of learning what it takes to sell a product, whether it be wine, brussels sprouts, or peaches,” he says. “And I study and try to understand the consumer – everything from consumer patterns and trends right down to individual one-on-one selling, which I encourage my staff to do – to understand what approach to take with a particular customer and how to make the sale.” “Pete has incredible insights into how to market on a very personal level to each and every customer,” says Hamilton, who joined Pete’s Frootique 22 years ago as a bookkeeper and has risen through the ranks to run both the retail and wholesale businesses. “He has this gift to make people feel very special, and
he knew how to translate that into a great way to sell fruits and vegetables.” And now he’s applying that talent to wine. While Pete’s Frootique and Luckett Vineyards are separate entities, they complement one another. For example, the Pete’s Frootique stores are the perfect venue for selling the farm’s plums, apples, blueberries, blackberries and pears. “We brand them all with Luckett Farms, and that is significant when the customers are making their choices.” Similarly, an occasional pop-up booth at Pete’s Wolfville allows store customers to sample and buy wine from Luckett Vineyards. And Luckett calls on his produce expertise to merchandise his wine, stacking the bottles in giant pyramids inside large wooden apple bins branded with the Luckett Vineyards logo. “So it’s actually produce marketing applied to wine.” Recently, Luckett’s 23-year-old daughter, Geena, joined the Vineyards team as events manager. “She has a business degree from
“Be first, best, or different.” That, says Luckett, is the key to any business. “In this world of giant retailers, it’s virtually impossible to compete on price alone,” he notes. “And we know we can’t be the first because in the world of food, it’s kind of all been done before. But can we be the best at expertise and knowledge and communication with our customers? I think we can. And can we be different? Yes, we can. It’s hard to be all three of these things, but if you can be one or two, I think it’s definitely key to helping you survive.”
grocerybusiness.ca
vegetables to
~ vineyards
Pointers from Pete
“Whether you’re selling lemons or Lamborghinis, you’ve got to turn your buyers into believers.” Buyers buy on price, but believers buy on emotion. “Wow” customers with an experience that compels them to return again and again. “You can’t be a great place to shop until you are a great place to work.” It is critical to understand and respect how much power lies in the hands of front-line staff. Build a destination workplace that retains and motivates the true ambassadors of your brand. “The place where your greatest fears live is also the place where your greatest growth lies.” Resisting change is a recipe for failure. Embrace change and involve employees in the process. Good companies manage change. Great companies create it. “As my father always said, if you can make ’em smile while you take their money, you’ve got it made.” Transform grocery shopping into a highly entertaining experience where every display is a feast for the eyes and a tantalizing array of colours, textures and fragrances.
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TYPE
MODULAR
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COMPACT
FLEXIBLE, ADAPTABLE, UNIQUE
CONVENTIONAL, STYLISH, MODERN
With K-class flex, screens, load cell, printers, etc. can be freely combined resulting in space-saving integrated solutions for your merchandising cases with all the technology features of the KH100.
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From
vegetables to
~ vineyards
From Nottingham to Nova Scotia Fun fact: Pete did a stint as a Queen’s Guard, but wasn’t able to keep from chatting up the tourists. He still has the hat.
Dalhousie University, so in lots of ways, she’s actually a lot smarter than Dad, which she’s always telling me,” he quips. “She’s doing a fantastic job,” he adds proudly. “I’d like to think that if it progresses, there is some succession in the winery component of the business there.” While Hamilton says people regularly contact Pete’s to request the construction of additional stores, the management team is proceeding cautiously, identifying geographic and demographic areas that are a good fit. “There’s lots of potential there, but we have to move slowly and we want to do it very wisely.” With consumers’ keen interest in health and wellness,
A born entrepreneur, Pete Luckett was, by the age of 14, already honing his marketing skills and produce expertise at Nottingham, England’s, busy outdoor food markets. Early success encouraged him to cross “the pond” in 1979, settling first in New Brunswick and then Nova Scotia. In 1992, Luckett launched Pete’s Frootique. “Pete’s” is now a multimillion-dollar retail and wholesale operation with three stores in Bedford, Halifax and Wolfville, N.S., specializing in fresh and exotic fruits and vegetables, along with deli, bakery, meats and fish, and more. In 2011, after years of planning, he opened Luckett’s Vineyards, bottling unique varieties of wines that thrive in Gaspereau Valley’s special maritime microclimate.
Hamilton believes Pete’s is “well placed to be really involved in helping people improve the way they eat and educating them. We’re excited about where we’re headed.” As for Luckett, he has no plans to rest on his laurels. “The potential to have a chain of 10 stores in the Maritimes is incredible, but the reality is one step at a time.” He is also eyeing an expansion of Pete’s ToGoGo, the fast-fare takeout/ eat-in arm of Pete’s. “I see fabulous potential for it, not only within Nova Scotia, but across the country – across the world, for that matter.”
Diane Hamilton, chief operating officer, Pete's Frootique
Pete’s ToGoGo on the move Although the winery occupies most of Pete Luckett’s time these days, he continues to look for new opportunities in food retailing. One of the most promising is the Pete’s ToGoGo arm of Pete’s Frootique, for which Luckett sees almost limitless potential. The fast-fare takeout/eat-in restaurant currently has t wo stand-alone locations in Halifax. The newest outlet opened in January, and is situated in the student union building at Dalhousie University where it is enormously popular among college students looking for healthier food options. “The first week or two that we opened, we ran out of food!” says Dianne Hamilton. “It’s been very successful, and it’s a concept that we certainly hope to expand.” Pete’s ToGoGo offers healthy breakfast, lunch and snack choices, including soups, salads and sandwiches – all freshly prepared on site. The concept was inspired by the British-based chain Pret A Manger (“ready to eat” in French), which launched in 1986 with a single location in London and has since grown to 295 shops worldwide. “I always look into, not copying, but stealing ideas and adapting them to our own style,” he laughs.
Pete's ToGoGo
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Independents’ Day
Sharpe’s Food Market Celebrating 50 years By Sally Praskey
When Sharpe’s Food Market threw a party recently, most of the residents of Campbellford showed up. This wasn’t just any party, mind you – it was a celebration of 50 years of serving this small, eastern Ontario community. Three generations of Sharpes hosted the special event to thank their customers for their loyal support over the years, while members of the community turned out to pay tribute to the family that has served them so well for so long. “We put on a free supper for the community to pay it back for their 50 years of support, and we were really gratified when 2,000 people came to celebrate with us,” says Steve Sharpe, co-owner and general manager, who, along with his brothers Tom and John, represents the second generation. The occasion was designed as a family evening, with bouncy castles for the kids and a cash grab booth for the adults, as well as plenty of food and an enormous cake decorated with historical photos that was graciously served up by Marian Sharpe, co-founder of the business with her late husband Bruce. Steve’s son Mike, who is in charge of marketing and produce purchasing, was pressed into service with the band when it found itself one musician short. As past chair of Distribution Canada Inc. (dci), Steve even put the selling group’s president and CEO, Brian Parker, and his
Sharpe’s co-founder, Marian Sharpe (in white), with family members at the 50th anniversary celebration
26
Team Sharpe Steve Sharpe (left), co-owner and general manager, Sharpe’s Food Market, Brian Parker, president and CEO, Distribution Canada Inc.
wife Lisa to work for the evening. “There is no other place I would rather have been on a Saturday night than helping Steve Sharpe,” says Parker. “It was an amazing experience. I don’t think corporate Canada could pull off what he did and what independents in general do. It seemed like the whole town was there to support the Sharpe family and thank them for being involved in the community for 50 years.” That involvement goes well beyond operating the store; over the years, the family has supported countless community
Celebrating 50 Years
Sharpe’s through the decades
’60s
fundraisers and charitable organizations. “They always have time for community-minded functions,” says long-time customer Andrea Conte. “It’s the example that both Marian and Bruce set that has instilled the goodness into the hearts of their children.” And that now includes the grandchildren as well. All of Bruce’s and Marian’s 10 grandchildren have at one time worked, or are currently working, for the store, making it truly a family business. Customers and employees also span the generations. “We just hired a young lady whose grandmother worked for us 40 years ago,” says Steve. The past 50 years were not without their challenges. With five competitors in their geographic area, including several discount grocers, the Sharpes knew they couldn’t compete strictly on price. “So we decided to be good at what they’re not,” says Steve. “We’ve put a lot of emphasis on fresh and selection around the perimeter of the store,” even rebranding it with the catchphrase “Fresh Thinking.” Steve gives full credit to both the Canadian Federation of Independent Grocers (CFIG) and dci for the store’s success and longevity. “Between CFIG and dci, they have been very helpful in making 50 years possible.”
’70s ’80s ’90s ’00s
2013
After 13 years in business, Bruce Sharpe closed his store in Toronto and relocated to Campbellford, Ont. In 1963, The Sharpe Market, with 5,100 sq.ft. of retail space, officially opened for business. (In 1962, Bruce and Marian Sharpe became two of the founders of the Canadian Federation of Independent Grocers [CFIG].) In 1974, The Sharpe Market changed its name to Sharpe’s $uper $ave of Campbellford. In 1976, Sharpe’s $uper $ave of Havelock opened. In 1980, an addition increased total retail space of the Campbellford store to 11,000 sq.ft. In 1985, the store changed its name to Sharpe’s Food Market, and the Havelock store was sold. The same year, Bruce Sharpe passed away, and sons John, Steve and Tom took over the family business. In 1987, the store underwent its sixth expansion in eight years, increasing the space by another 4,000 sq.ft. In 1991, an extensive renovation to the floral, produce, meat and deli departments was completed, and a new logo introduced. In 1996, the store joined IGA and became Sharpe’s IGA. In 2001, a 5,000-sq.ft. expansion brought the store to its current 25,000 sq.ft. In 2007, Sharpe’s left the IGA chain and returned to its roots as an independent, becoming Sharpe’s Food Market. In 2008, Sharpe’s acquired a 33,000-sq.ft. warehouse, allowing it to buy direct from the manufacturer and pass on the savings to customers. In 2010, Marian received a Lifetime Member designation from CFIG for her outstanding contribution to the independent grocer community. A year later, the store was inducted into the CFIG Hall of Fame for consistently demonstrating excellence. This past winter and spring, Sharpe’s underwent a significant upgrade/redesign. “The challenge is to respect the past but project a modern store,” says Steve. “Basically, it was a 50-year-old facelift”.
Community guests enjoy the 50th festivities A commemorative 50th anniversary cake
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Independents’ Day
Competitive Edge Peter Larkin, president and CEO of the National Grocers Association, discusses the competitive edge independent grocers have in today’s quickly evolving retail landscape Grocery Business: What do you consider your most notable accomplishment during your three years with the NGA? Peter Larkin: Without a doubt, it is the development and implementation of the NGA Member Value Proposition project (MVP). I travelled the country to meet with members (and potential members) to ask three important questions: What do you like about NGA? What can we do better? What would you like us to do in the future? We collected a lot of data, sifted through it and analyzed it all in an effort to better understand what members wanted and needed from us. From that we created the MVP project, which identified eight key initiatives that became our roadmap for the future.
GB: The retail landscape is changing rapidly – what opportunities do you see for the independent grocer? PL: I sincerely believe that now, more than ever, the future looks very bright. I believe we’re seeing a shift in consumer attitudes about what they want from their shopping experience. Price is not as important as value. Big is not as attractive as local. Fresh, local and knowing the people responsible for selecting the products on the shelf are more important than abundance and absent ownership. Independents surely have a competitive edge and many are already taking advantage of the opportunity.
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September | October 2013
GB: What do you consider the independent grocer’s greatest challenge right now? PL: There are many. I’ll just mention a few: »» Technology: All retailers need to understand how technology can improve the customer shopping experience and drive costs out of their business. Sorting through the options is daunting, choosing the right solution is complicated and finding the financial resources is difficult. But those who want to survive in the new world must figure it out. »» Untraditional formats: » In the U.S. market, dollar stores, drugstores, specialty stores, price-impact stores and many others are making inroads into the food retailing space. Independent supermarket operators need to understand the impact these new players will have on their business. »» Digital competition: » Amazon is already having an impact in some markets and has plans to aggressively expand its fresh food delivery model throughout the United States.
Independents’ Day
2/3 GB: What trends do you see affecting consumer choices in the U.S.? PL: NGA works with Supermarket Guru Phil Lempert to conduct the annual Consumer Panel Survey. The 2013 report highlighted the following consumer trends: Convenience: Simpler ways to assemble and prepare meals, especially for people who need more confidence in the kitchen. Many CPG food brands already emphasize this, and stores that deliver meal solutions are seen as stronger destinations. Easier ways to eat healthier: Boomers will account for more than half of grocery purchases by 2015. They want to eat smarter as they get older. This means more fresh foods, more prominent assortments of good-for-you choices, and better guidance through store merchandising, apps and websites. Food diversity: More eating at home means it’s challenging to keep meals interesting. This is especially true for larger households. If independent supermarkets learn to satisfy the chief household shoppers (typically baby boomers who are delaying retirement), their grown children, and elderly parents, they can replicate success in smaller households, too.
By Noelle Stapinsky
grocerybusiness.ca
of respondents say fresh foods, particularly produce, prompt their supermarket visits
Fresh, safe foods: Two-thirds of respondents (66.4 per cent) say fresh foods, particularly produce, prompt their supermarket visits. Buying conversion is high but could be higher, since 84.3 per cent say they spend more than half of their fresh-food dollars in supermarkets, according to our research.
GB: describe the programs you’ve implemented recently to assist independents leverage their strength as a group. PL: I believe independent grocers who understand and implement technology that adds value to their customers will have an advantage in the marketplace. We have partnered with the Center for Advancing Retail & Technology (CART) to create new opportunities for members through a number of platforms. The first is the NGA Innovation Center, which allows retailers to serve as “live learning labs” for innovative research of in-store solutions and marketing concepts. The second is that the NGA Solution Center will, when it is fully developed, help retailers assess their technology position and create a roadmap for how to implement their technology strategies moving forward. It will also
Independents surely have a competitive edge and many are already taking advantage of the opportunity
have resources such as evaluation tools, sample RFPs, and procurement how-tos. The third initiative is Personiphi. The mission of Personiphi is to unite independent and mid-market grocery retailers into a cohesive, nationwide marketing network and use their combined scale to gain increased access to the growing pool of shopper marketing funds that are only available to retailers and wholesalers that have the technical capability to deliver customer specific promotions to their shoppers. Personiphi is currently in the start-up stage of development but we are very encouraged about its potential to add significant value to our members and their customers.
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Independentsâ&#x20AC;&#x2122; Day
Financial Survey 2012 National Grocers Association
Productivity Avg. transaction size:
$22.73
Avg. scans per minute: The 2012 Independent Grocers Financial Survey, conducted for the National Grocers Association and FMS Solutions*, covers the operational and financial performance of independent food retailers in the United States during fiscal 2011. This report, the latest available from NGA, found that with continued economic woes, shoppers remained extremely value-focused, which led to difficult decisions relative to gross margins and prices in the midst of high food inflation.
Annual Inventory Turns 18.6
Dry grocery: 12.2 turns
18.6 18.0
Inventory Turns by Department
18.0
Dairy: 32.1 turns 16.1
Meat: 36.6 turns Produce: 46.3 turns
2007 2008 2009 2010 2011 *FMS Solutions provides independent retail grocers and supermarkets with the financial information needed to make informed operational decisions.
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September | October 2013
21.6
Avg. cases stocked:
38 (day) / 45 (night) Avg. number of transactions per store:
9,750
Transactions by Lane Type
86.9%
cashier-assisted lanes
9.4%
express lanes
3.7%
self-checkout
Independentsâ&#x20AC;&#x2122; Day
Annual Shrink Shrink levels vary widely by company size
Sales by Department
as well as format. Catering to the local
market may give independents a more accurate insight into demands and
changes among their shopper audience.
Dry grocery: 0.9%
40 2010
2011
30
Dairy: 1%
20
Meat: 3.8%
10
Produce: 5.6% 0
Prepared Food: 7.2%
GROCERY
dairy
frozen
hbc
gm
tobacco produce floral
meat
deli
bakery seafood pharmacy other
Store Gross Margins After two years of declines, total store gross margins improved to 26.33 per cent across all respondents.
Single-store operators continued to outplace their multi-store counterparts.
% 29 28
Share of employees working full-time
27
(all independents)
26
Average turnover part-time
25 24 23 Single-store companies
22
Multi-store companies
21 20
44%
Average turnover full-time
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
grocerybusiness.ca
12%
35% September | October 2013
31
Independents’ Day | International
Steeped in tradition New Orleans, Louisiana
A New Orleans grocery store that was devastated by Hurricane Katrina has been remodelled to meet the unique needs of the stricken neighbourhood By Sally Praskey
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September | October 2013
Recent flooding in Alberta, Ontario and the Maritimes has brought into sharp focus the devastation that these severe weather events can wreak. Grocers who are increasingly at risk of suffering weather-related damage can take inspiration from family-owned independent Robért Fresh Market, whose five New Orleans locations were completely destroyed by Hurricane Katrina in August 2005. Showing the determination and resilience for which independents are known, the family re-opened one location as early as November 1. After renovating and rebuilding two more of his stores, owner Marc Robért purchased and resurrected a site that had been abandoned post-Katrina, turning it into a thriving neighbourhood grocery store that is once again a focal point for the community, as well as a symbol of rebirth.
The setting: A 22,000 sq.ft. store in the Lakeview neighbourhood of New Orleans that was damaged by Hurricane Katrina and not re-opened by the previous owner. The players: Now called Lakeview Grocery, the store was purchased by Robért Fresh Market, an independent family-owned business with four stores and a fifth on tap. Owner/president Marc Robért retained Eugene, Oregon-based King Retail Solutions – spearheaded by creative director Christopher Studach – to design a store that would meet the needs of the Lakeview neighbourhood. The history, PRE-KATRINA: The store was very successful under the previous owner, says Robért. Because it was situated close to Robért’s main Fresh Market store, he decided to purchase the location to discourage any competition. “It gave us the opportunity to have another store designed for the Lakeview neighbourhood, and not market it directly against our nearby store,” he says. Although the two neighbourhoods are close geographically, they consider themselves “separate and distinct.”
The prepared-foods section (pictured at left), features popular local favourites such as po-boys, a traditional Louisiana sandwich. The indoor/outdoor Harrison Cove restaurant (above, and at right), serves up Louisiana specialties.
The research: A market research firm conducted an extensive investigation to determine what distinguished the Lakeview neighbourhood, so that those nuances could be reflected in the store’s design. “We wanted to give [residents] a product they would be proud of,” says Robért. The challenge: The research revealed a nostalgic affinity for the traditional neighbourhood market that had previously occupied that location, notes Studach. “Yet at the same time, [respondents] wanted some of what we would call modern American supermarkets – prepared food, a deli, and other amenities you wouldn’t necessarily associate with a small, neighbourhood market.” The design: When customers enter the store, they see a set of seasonal/promotional merchandising. “Those are all value-driven items,” explains Studach. “It’s all about value message. We have chalkboards above each of those islands to communicate the promo offers. You’re drawn to that by lighting, design and layout. “We purposely went with white refrigeration pieces throughout, and very simple graphics and décor,” he grocerybusiness.ca
adds. The layout is straightforward, with perishables scattered around the perimeter. The more modern prepared food categories – sandwich counter, deli, bakery, beverage counter – are presented as “a traditional power line-up” along the left-hand side of the store. A nearby large island serves as a breakfast bar in the mornings and a soup and salad bar later in the day. Adjacent corner doors lead to an indoor/outdoor restaurant called Harrison Cove that serves up Louisiana specialties like oysters and crawdads. “The restaurant was purposely a separate brand so it wouldn’t take away any square footage from the basics that shoppers clearly desired,” says Studach. “The deli and sandwich area sits right next door on the inside of the store, so they cross-feed each other.” The results: While the store has not yet reached pre-Katrina sales levels because of the approximately 50 per cent decline in households, “it’s doing well,” says Robért. “The houses are better, and the neighbourhood is better,” he notes. “It’s just a smaller neighbourhood.”
Measuring ROI Most stores see a 7-10 per cent sustained increase in sales the first year of an upgrade. Besides pure sales lift, the core measurables that an owner would track should answer these questions:
* How many unique shoppers are visiting the stores?
* What is the average transaction count?
* What is the average basket size?
* What is the average visit duration?
* What is the average return frequency?
You can’t measure retail design, no matter how well thought-out, until it’s executed. Poor execution can undo even the best planned layout and store design. Christopher Studach, creative director, King Retail Solutions christopher.studach@kingrs.com
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Technology
Mobile Personas
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September | October 2013
Sixty-nine per cent of Canadian marketers either have started dabbling in mobile, or will in the next year, according to BrandSpark International. The Mobile Personas study, a joint initiative of BrandSpark, Tapped Mobile and AppPromo, is the most in-depth Canadian study showing how Canadian consumers use their mobile devices, their attitudes and behaviours towards mobile and how mobile plays a role in the evolving digital landscape. The full Mobile Personas report is available from BrandSpark. Contact Mark Baltazar, Mbaltazar@BrandSpark.com, for more information.
Making Standards Work for You With 6 billion daily scans, GS1 is bringing efficiency and traceability to supply chains around the globe. GS1 Canada is a neutral, not-for-profit industry-driven organization that works with its more than 20,000 members â&#x20AC;&#x201C; organizations of all sizes from over 20 sectors across Canada â&#x20AC;&#x201C; to enhance operational efficiency through the adoption of standards. GS1 Canada is a member organization of GS1, the worldâ&#x20AC;&#x2122;s leading supply chain standards organization, with 111 member organizations serving 150 countries.
Beyond the Barcode It has been 40 years since GS1’s global organization pioneered the barcode as a single standard for product identification. A year later, a Montreal supermarket chain implemented one of the first largescale barcode systems in Canada, with 320 items marked. Today, more than six billion daily scans of UPC barcodes bring efficiency, visibility, and traceability to supply chains around the globe. Today, GS1 standards are about much more than barcodes. They provide a framework for companies to identify, capture and share trusted information that drives operational efficiency and greater visibility
for their products and services, enabling them to more effectively ensure safety and communicate with suppliers, customers, and consumers. GS1 Canada represents Canadian interests as new global standards are developed to keep up with the evolution of retail. When companies have access to real-time knowledge about their products and transactions, they can make decisions that drive business value. For example, real-time updates enable companies to track location more precisely, plan with greater accuracy, forecast demand more effectively, and implement efficient recall programs.
The Grocery sector is the most advanced in its implementation of GS1 standards, and has realized numerous benefits as business processes evolve in an increasingly complex competitive and regulatory landscape.
SETTING THE STANDARD DID YOU KNOW?
In a survey of 149 companies with predominant global supply chains:
80% of GS1 Canada’s 20,000
Users who adhere to GS1 standards are twice as likely as others to monitor transport and logistics activities at the unit and container level.
subscribers are SMEs that generate billions of dollars in sales each year.
THE TOP
20%
best-in-class companies comply with GS1 standards.
Standards established - Industry leaders in the United States selected a single standard for product identification (the Universal Product Code or UPC) over seven other options. This barcode is still in use, and is known today as the GS1® bar code.
1972 The Uniform Grocery Product Code Council (later called the Uniform Code Council) was established.
2
of respondents ranked supply chain visibility as a high priority for improvement.
Source: Supply Chain Visibility: A Critical Strategy to Optimize Cost and Service, Aberdeen Group, 2013.
Members of the Grocery Manufacturers of America (GMA) and the National Association of Food Chains expressed the need for an "inter–industry product code.”
1969
63% 1973
Why ECCnet Registry ECCnet Registry is GS1 Canada’s centralized product registry–an industry-driven fully bilingual repository based on standards, that facilitates the safe and efficient exchange of product and location data among trading partners. Trading partners access this data through tools and services that support the registry, and incorporate it into key business processes that range from new item introduction to hospital menu planning to consumer product recall. The data in ECCnet Registry is perpetually cleansed and validated to ensure accuracy, integrity and compliance with Canadian business and regulatory requirements.
FAST FACTS ECCnet Registry contains data for more than 450,000 unique products.
ECCnet Registry has been delivering value for 12 years to users in Grocery, Foodservice and Pharmacy. In fact, the Canadian grocery sector’s collaboration with GS1 Canada to develop ECCnet Registry has made it a global leader in data integrity and supply chain visibility. Non-competitive and based on global standards, ECCnet Registry provides a link between trading partners for data synchronization, allowing them to electronically share trusted, accurate product information. Retailers – no matter their size – can access product images, planograms, and other information from one “single source of the truth.”
Businesses benefit from data synchronization in concrete and measurable ways:
50% improvement in order and item administration
40% less coupon rejection at checkout 30% less effort in data management Reduction in out-of-stock items from 8% to 3% Source: Accenture & Capgemini studies
Case Product Data Medical Administration
Directly to ECCnet Registry
SUPPLIER
Marketing Information
DATA LOADING / PUBLISHING
Consignment Inventory Inventory Management
Through other data solutions provider
Nutrition Information
Menu Planning Product Recall
Product Images
CONTACT US
For more information, visit GS1 Canada at www.gs1ca.org 416.510.8039 | 1.800.567.7084 | info@gs1ca.org
On April 26, 1974, a pack of Wrigley’s gum became the first product to be scanned with a GS1 barcode in a supermarket in Ohio. The Uniform Code Council (UCC) was established in the U.S. as a not-for-profit standards organization.
1 974
1974 October 1, 1974: GS1 barcode came to Canada - Montreal supermarket chain Steinberg’s Ltd. implemented one of the first large-scale barcode systems in the country, with 320 items marked.
3
The barcode went global - Based on the original GS1 barcode, a 13th digit was engineered, allowing the identification system to go global.
1976
ECCnet Registry Value-Added Services At the request of industry, GS1 Canada developed a number of value-added services. Designed in collaboration with suppliers and data recipients, these services support a broad range of industry-sponsored business process improvements.
ECCnet Registry receives data from multiple data pools, and serves as a global best practice as it relates to data integrity and Canadian use-case data such as metric, tax harmonization, building codes, recall and stewardship. It is a fully bilingual registry built for industry under industry's direction and is used every day by more than 3,000 manufacturers and retailers.
Data management services • Outreach across the supplier community to ensure all products are loaded and that sector-specific data requirements are met.
• Comprehensive on-boarding through a bilingual call centre, online and in-person training, and business requirements identification.
• Data loading tools that are scalable to member needs and that support full life-cycle needs, from initial product registration through publication through error detection and correction.
• Support to industry on its commitment to data completion and integrity in the Canadian supply chain.
• Customer-specific product listing forms to support new item introduction.
• Access to a central source of standards-based product images and dimensional data to support planograms, marketing, patient safety and nutrition management needs.
• Data integrity services that include data validation tools, certification of product information as it is loaded, and GTIN (Global Trade Identification Number) Discrepancy Reporting (GDR).
Community management services • Through industry boards and committees, ongoing collaboration with industry and governments to identify enhancements to support evolving business process and patient/customer care demands.
Business process integration services
FAST FACTS
• An online communication tool, based on standards, that enables sharing of notifications between trading partners, ensuring that recalled products are quickly removed from shelves and that urgent health notifications are communicated.
There are more than 90,000 product images in the ECCnet Image & Validation database. More than1,200 trading partners
• Sustainability processes and tools that enable the identification, capture and standardization of product packaging data in alignment with trading partner reporting requirements and environmental stewardship goals.
subscribe to GS1 Canada’s Product Recall service.
Birth of the EPC® code - The Auto-ID Centre at the Massachusetts Institute of Technology (MIT) was launched, leading to the development of the Electronic Product Code™ (EPC®). Specifications for the GS1 DataBar™ (a reduced space symbology) were approved.
ECCnet Image and Validation Services established.
1 977
1996
The European Article Numbering (EAN) Association was established as an international not-for-profit standards organization. With a head office in Brussels, Belgium, the EAN Association had 12 founding member organizations from European countries. Together, they launched the GS1 identification system to improve supply chain efficiency in the retail sector. 4
1997
1999
The Electronic Commerce Council of Canada (ECCC) was established, representing Canada in the continuing development of the global language of business.
Get Recall Ready with GS1 Canada Built under the direction of the industry, GS1 Canada's Product Recall and withdrawal service is a secure standards-based online service that ensures that potentially unsafe products are recalled efficiently. The service enables manufacturers, distributors and retailers to collaborate and share mission-critical product recall information in a secure and timely manner. The service offers:
DID YOU KNOW? The now familiar barcode comes in a new version—the GS1 DataBar. Smaller, it can be placed on small items, like a piece of fruit, and contain more information, such as a “best before” date.
NEW
Certified “Nutritional”
• A central source through which to share recall, withdrawal and incident notifications with trading partners; • A single notification form that can be used by all trading partners; and • A one-to-many distribution process, enabling companies to reach multiple trading partners at once.
GS1 Canada works with retailers and manufacturers of all sizes through a number of industry associations and collaborative industry initiatives. For example, Walmart and Longo’s were instrumental in the development of Product Recall service, paving the way for hundreds of companies to be certified as Recall Ready and reap the benefits of this state-of-the-art communication tool that expedites uniform communication about product recalls among trading partners.
ECCnet Item Certification is an online, central source of accurate and trusted product-related nutrition data and images. This information is certified by brand owners and then made available to trading partners using a publication and subscription process consistent with the trading partner experience in ECCnet Registry. ECCnet Item Certification requires product or brand owners to certify data accuracy in the following areas: • Product details • Nutrition facts (as they relate to the nutrition panel on the product) • Ingredients (as they relate to the ingredients label on the product) • Common allergens • Product certifications (e.g., Kosher, Organic, Halal) RECALL
INDUSTRY RECALL FORM
GS1 CANADA PRODUCT RECALL PROGRAM
SUPPLIER
TRADING PARTNER
RECALL
Consumers are demanding more in relation to the products they buy. They want to know a product’s nutritional information, its safety record, where it was manufactured, how it was imported, whether it has ever been recalled, and what regulatory requirements it conforms with. To support this expectation for information, brand owners will want to make sure that their data is accurate, current and perpetually cleansed. Additionally, with governments like the U.S., EU, and Canada becoming very aggressive with respect to labelling requirements and other health and safety issues, GS1 Canada and its industry partners must be ready to respond. —Eileen Mac Donald, Chief Operating
RECALL
Officer, GS1 Canada
TRADING PARTNER TRADING PARTNER
Launch of GDSN - The Global Data Synchronization Network (GDSN), a global, Internet-based initiative that enables trading partners to efficiently exchange product master data, was launched.
ECCnet Registry established.
20 00
20 0 2
At the start of the new millennium, GS1 had a presence in 90 countries.
5
2003
2004
GS1 formed EPCglobal, and initiated development of the EPCglobal architecture and standards. The GS1 DataMatrix (the first two-dimensional symbol adopted by GS1) was approved.
2005 The new name for the organization, GS1, was launched worldwide. The Electronic Commerce Council of Canada (ECCC) joined GS1, the largest e-commerce standards organization in the world, and officially became GS1 Canada.
THE NEW
Consumer: Demanding More The role of GS1 standards and ECCnet Registry in delivering one version of the truth for product data and images has never been greater. We have an educated and increasingly demanding consumer, empowered with technology, mobile and online, who is asking for more and more access to information. This has changed the buying experience because these consumers are researching before they shop, which impacts what they buy and where they buy it. All this pressure is changing the way brand owners and retailers are reacting, as the consumer is now driving the purchase more than ever before. In some ways, the traditional supply chain has evolved to become a â&#x20AC;&#x153;valueâ&#x20AC;? chain, with the B2B process now having to consider the B2B2C experience.
More and more, consumers are demanding real-time updates on products, and the ability to scan barcodes to obtain information. GS1 Canada is preparing for this new reality by building databases for product ingredients, nutritional information, and other attributes. Consumers now demand readily available product information with real-time updates and the ability to scan barcodes or take a photo of a product to obtain information such as brand, price and stores where it is available, according to The Future of Standards in the Consumer Goods and Retail Industry, a 2013 study by
FAST FACTS
â&#x20AC;&#x201D;N. Arthur Smith, CEO and President, GS1 Canada
2011
2011
Launch of ECCnet Locations.
6
Consequently, the study notes, it is critical to have consistent information available via all channels: in-store, online, and mobile. According to GS1 global research, consumers are most interested in nutritional and ingredient information, followed by information about allergies, organic certification, environmental impact, and ethical accreditation.
75% 91% 75%
of consumers research prices, half of them using smartphones
of mobile barcode scans returned incorrect or incomplete descriptions returned no information at all
GS1 expanded its offerings with the approval of the Quick Response (QR) code. The QR code is a two-dimensional barcode that offers fast readability and greater storage capacity.
Launch of GS1 Canada Product Recall.
2 009
Capgemini Consulting. Many seek information beyond the label, including the stories behind the products, product origin and manufacturing working conditions.
2013
With presence in 111 countries, GS1 celebrates 40 years of the barcode and the global language of business.
Perspective: GS1 Canada Board of Governors Perspective:
GS1 Canada Grocery Sector Board
The most significant impact GS1 Canada has had on the grocery industry is in the area of standards, from bar codes to traceability standards. Today, most major grocery retailers source products from around the world, so enabling industry-compliant, globally accepted standards drives efficiency and productivity for both the manufacturer and the retailer. The fact that GS1 Canada is neutral is critical because it ensures that its efforts represent the interests of the industry, rather than individual enterprises. This starts at the very top with the executive board which is made up of both major retailers and manufacturers. So, we–the industry–determine what GS1 Canada’s priorities are, and govern the organization from this collaborative perspective. One of the key initiatives that the industry has driven GS1 Canada to deliver is ECCnet Registry. The demand for information is growing rapidly, and having access to centrally-stored accurate data is of immeasurable value. —Peter McMahon, Chief Operating Officer, Loblaw Companies Limited, Member, GS1 Canada Board of Governors
7
The Grocery Sector Board is a perfect example of how collaboration between retailers and suppliers benefits everyone. Co-chaired by Tom Michaelis, Vice-President, Customer Development for Unilever Canada, and François Bouchard, owner of Ottawa’s The Country Grocer, the Board brings together trading partners to develop solutions that benefit the Canadian consumer as well as the market overall. Even as a small independent, Bouchard says he can simply go to the GS1 portal and access all the information he needs for most of his business applications. “It makes
it much easier than trying to collect it from all the independent sources out there,” says Bouchard. “Having access to the information–the same as all the majors do–helps us in a lot of ways that were difficult in the past. We get the recall information at the same time as the majors. We get the same images, the same planogram pictures. Everybody benefits equally.” Michaelis agrees, adding that “it doesn’t matter what size your business is. You can still be a complete partner in this world of standards-based information. GS1 creates tremendous efficiencies for both manufacturers and retailers.”
François Bouchard President/Owner, The Country Grocer, Inc.; Co-Chair, GS1 Canada Grocery Sector Board
Tom Michaelis Vice-President, Customer Development, Unilever Canada; Co-Chair, GS1 Canada Grocery Sector Board
GS1 CANADA BOARD MEMBERS GS1 Canada Board of Governors John A. Rothschild, Chair Chief Executive Officer, Prime Restaurants Inc. François Vimard, Vice Chair Executive Vice President, Sobeys Inc. Stuart Fraser, Treasurer Consultant George Attar Senior Vice President, Chief Technology and Information Officer, McKesson Canada François Bouchard President, The Country Grocer, Inc. Robert W. Carpenter Chief Executive Officer, GS1 US Andrew Ellis Senior Vice President, Supply Chain & Logistics, Walmart Canada Margaret Hudson President, Burnbrae Farms Ltd. Thom Lachman President, Procter & Gamble Dave Lemmon Managing Director, Smucker Foods of Canada Corp. Calvin McDonald President & CEO, Sears Canada Inc. Peter McMahon Executive Vice President and Chief Operating Officer, Loblaw Companies Ltd. Jim Noteboom Senior Vice President, Business Analytics & Financial Services, Shoppers Drug Mart Sylvain Prud’homme President, Lowe’s Canada Javier San Juan President & Chief Executive Officer, L’Oréal Canada Frank Scorpiniti Chief Operating Officer, Katz Group Canada Ltd. Peter Singer President, Thomas, Large & Singer Inc. N. Arthur Smith President & Chief Executive Officer, GS1 Canada Scott Smith President, J.D. Smith and Sons Ltd. Murray Wood Vice President, Supply Chain Management, Aramark Canada
GS1 Canada Grocery Sector Board François Bouchard, Co-Chair President, The Country Grocer, Inc. Rick Britton Senior Vice President, Thomas, Large & Singer Inc. Dave Chapman Executive, Retail National Accounts, Burnbrae Farms Ltd. Pierre Charron Vice President, National Grocery Procurement, Metro-Richelieu Inc. For more information, visit GS1 Canada at www.gs1ca.org. 8
Greg Christopher Senior Vice President, Supply Chain Operations, Nestlé Canada Roman Coba Chief Information Officer, McCain Foods Ltd. Lillie Cruikshank Vice President, Shared Services, Sobeys Inc. Suzanna Dalrymple Director, Corporate Sales Strategy & Planning, Procter & Gamble Julie Edwards Vice President, Integrated Supply Chain, Kraft Canada Ward Hanlon Vice President, Industry Relations, Canadian Federation of Independent Grocers (CFIG) Michele Hardinge Senior Vice President, Fresh Food, Walmart Canada Stephen Kouri Vice President, Sales & Trade Marketing, Smucker Foods of Canada Corp. John Larsen Vice President, Customer Service, Colgate-Palmolive Canada Eileen Mac Donald Chief Operating Officer, GS1 Canada Pierre Massicotte Senior Vice President, L'Oréal Canada Lesley McKeever Senior Vice President, Industry Relations, GS1 Canada Tom Michaelis, Co-Chair Vice President, Customer Development, Unilever Canada Alex Miller Vice President, Integrated Supply Chain, Mondelez Canada Hanif Mohamed Director, Grocery Operations, Canada Safeway Ltd. Tina Murrin Senior Vice President, Conventional Finance, Loblaw Companies Ltd. Derek Nighbor Senior Vice President, Food and Consumer Products Of Canada (FCPC) Mike Olson Vice President, Innovation & Supply Chain, Overwaitea Food Group
GS1 Canada Foodservice Sector Board Brian Arbique Vice President, Foodservice & Retail Sales, H.J. Heinz of Canada Company Ltd. Debby Atallah Senior Vice President, Industry Relations, GS1 Canada Paul Bourrie President, McCormack Bourrie Sales & Marketing Chris Compton Vice President, Foodservice, Maple Leaf Consumer Foods Dan Flanagan President & Chief Executive Officer, Flanagan Foodservice Inc. George Franchetto National Sales Leader, Nestlé Canada Frank Geier, Co-Chair President, GFS Canada Company Inc. Doug Grant Senior Vice President & Chief Operations Officer, The Oppenheimer Group Wayne Greer Vice President & General Manager, Foodservice, Weston Bakeries Ltd. Jayne Hughes Vice-President, Operations, Zast Foods Corp. Eileen Mac Donald Chief Operating Officer, GS1 Canada Derek Nighbor Senior Vice President, Food and Consumer Products Of Canada (FCPC) Barbara Peters Vice President, Foodservice, Kraft Canada John Rothschild Chief Executive Officer, Prime Restaurants of Canada N. Arthur Smith President & Chief Executive Officer, GS1 Canada Peter Vale Vice President, Strategic Sourcing, Cara Operations Murray Webb Vice President, Supply Chain Management, Aramark Canada Randy White President and Chief Executive Officer, Sysco Canada
Pat Pessotto Vice President, Grocery Merchandising, Longo Brothers Fruit Markets Inc.
Garth Whyte President & Chief Executive Officer, Canadian Restaurant & Foodservice Association (CRFA)
J.D. Robichaud Vice President, Sales, Campbell Company Of Canada
Gord Wilson, Co-Chair President, GCW Management Consulting Inc.
N. Arthur Smith President & Chief Executive Officer, GS1 Canada Shawn Tomczyk IT Director, Quality Foods David Wilkes Senior Vice President, Grocery Division, Retail Council of Canada (RCC)
If you aren’t already connected with GS1 Canada, here is an opportunity to learn more. Subscribe to our services, participate in a working group, or join a committee. Membership in GS1 Canada can help your organization increase efficiencies, save costs, and keep up with the latest developments in global e-commerce standards.
Toronto Office 1500 Don Mills Road, Suite 800, Toronto, ON M3B 3K4 P 416.510.8039 | P 1.800.567.7084 | F 416.510.1916 | E info@gs1ca.org
An APPetite for grocery delivery by Noelle Stapinsky
It’s a well-known fact that Canada, holds the title as the world’s most engaged Web nation. So it shouldn’t be a surprise that within the first six months that Toronto-based Grocery Gateway released an innovative suite of apps and a mobile website – putting its grocery delivery service in the palm of the shopper’s hand – sign-up rates spiked, basket sizes grew and the mobile adoption rate doubled. Unata, a Toronto-based shopper marketing technology company, developed this unique suite of apps, which provide platforms for iPhone, iPad, Android, Windows Phone 8 and Mobile Web. The focus was to deliver a personalized online ordering experience and maximize user engagement for Grocery Gateway, one of Canada’s leading online grocery delivery services that’s owned by Longo Brothers Fruit Market Inc. and operates in the Greater Toronto and surrounding areas. Using integrated personalization technology – Unata’s Entice module – the app puts the most relevant content in front of the consumer. “We look at things like purchase history in
grocerybusiness.ca
order to figure out what products are trending and which would be most relevant to an individual,” says Chris Bryson, Unata founder and CEO. “For instance, the Feature Section provides quick access to what we believe will be the most relevant product for the user.” But what surprised Bryson with the introduction of the apps was the hybrid usage that occurred between the original website and the new mobile capabilities. Since the apps and the website are synchronized, users can start their order on their home computer, for example, and add to it or finish the order using their mobile device. “My assumption, which turned out to be incorrect, was that people would stay on one channel,” says Bryson. “But people just started using it as another tool, and go back and forth between the two.” According to an in-market case study that was released by Unata, Grocery Gateway has experienced a 43 per cent year-over-year increase in sign-ups since the launch; mobile purchases drove eight per cent of monthly orders, and the number of
items added to virtual baskets rose by 14.9 per cent. “I think the numbers speak for themselves,” says Bryson. “But it does show that consumers have a healthy appetite for using their mobile devices to shop.”
% of Grocery Gateway orders placed via Mobile 7.2% 4.0%
5.1%
6.0%
8.2%
6.1%
NOV DEC JAN FEB MAR APR
2012 2012 2013 2013 2013 2013 Source: Unata
+15% increase
in number of basket items Source: Unata
September | October 2013
35
the advantage retailer REPORT
Retailers rate suppliers The latest Advantage Report shows the customer/supplier relationship is getting stronger By Sally Praskey
Following a period of deteriorating relationships between retailers and manufacturers, the improvement that began to take shape last year has continued, according to the latest Advantage Report, an annual survey of major grocery/mass/ club/drug retailers conducted by Toronto-based Advantage. In this year’s survey, the company asked retailers: “Over the past 12 months, would you say that the customer/supplier relationship in the industry has become stronger, the same, or weaker?” “A majority of the respondents we questioned indicated that they feel relationships have strengthened,” says Paul Cussons, director, client services – Canada, at Advantage. “This is due to increased communication about planning and strategy. These practices are very important to retailers, as Joint Planning and Understanding Strategy are both in the top 10 of retailer priorities.” As in the previous year, the top priority for executives, senior management and category managers was “works with a sense of urgency to meet agreed upon deadlines.” However, climbing from eighth position in 2012 to second this year was “provides appropriate investment level and flexibility, enabling us to achieve planned objectives.” As one respondent put it: “We spend more time with vendors that have genuine plans to grow their business. Investment is not only spending more money on promotions, but investing in resources to ensure in-stocks are better and to analyze numbers.” Others
36
September | October 2013
expressed the need for account managers to have the authority to make decisions. For inventory and logistics managers, the top two priorities, unchanged from last year, were “delivers orders on time/at the time requested” and “delivers complete orders/high % fill rate,” respectively. The third priority, moving up all the way from ninth, was “understands and responds to the unique strategies and goals/ needs of our company.”
Room for improvement The news is not all positive, however; there has been a “significant reduction” in the net favourable scores across many categories in supply chain and logistics, says Cussons. “We believe this is not so much due to underperformance by manufacturers in the food and consumer products industry in logistics, but to a dramatic increase in the expectations that are being placed on them by retailers,” he says. Retailers are looking to suppliers for help in many areas when it comes to logistics, but in particular, collaboration on forecasting, management of excess inventory, and, of course, the delivery of product on time, every time. Communication is also critical; if there is a delay in production, retailers need to be advised.
NEGATIVE
TM
H ow has the development of e-commerce in your industry impacted the relationships between retailers and manufacturers? Some of the responses received: (The size of the circles represents the relative number of responses.)
MIXED “E-commerce has affected speed to market as customers have become more aware. This puts pressure on the retailers to ensure they have certain products ready, especially innovation. If a company is launching a new product, the word can be quickly spread through the web and social media. Pressure is created to make things happen logistically; speed to market becomes very important.”
E-commerce strains relationships; manufacturers have to deal with both online buyers and in-store buyers. Sometimes, communication between the online and store buyers is not the greatest.”
NEUTRAL grocerybusiness.ca
POSITIVE
“E-commerce has improved customer-supplier relationships. In the past, we were limited by the space we have based off of certain footprints. When manufacturers are coming out with new products they want to have listed with us, we have to remove one of their other products, which is never an easy discussion to have. Now, with e-commerce, we can still have the best possible assortment in our stores, and the balance of products can now be put on our website to let our customers know we have it available.”
“We have not seen an effect on relationships between retailers and manufacturers yet, but we are sure that e-commerce will begin to have an impact.” September | October 2013
37
the advantage retailer REPORT Retailer Priorities for Category Management
Retailer Priorities for Logistics Management
Ranking 2013
2012
Works with a sense of urgency to meet agreed upon deadlines
1
1
Provides appropriate investment level and flexibility enabling us to achieve planned objectives
2
Understands and responds to the unique strategies and goals/needs of our company
3
Ranking 2013
2012
Delivers orders on time/at the time requested
1
1
8
Delivers complete orders/high % fill rate
2
2
2
Understands and responds to the unique strategies and goals/needs of our company
3
9
The impact of e-commerce A new area that The Advantage Report examined this year was e-commerce, as it asked respondents: “How has the development of e-commerce in your industry impacted the relationships between retailers and manufacturers?” While most of the responses had mixed opinions (see diagram on previous page), and only a few were negative, Canadian retailers are far behind their European counterparts when it comes to e-commerce, says Dwight Konings, VP, Program Innovation and Commercialization, Advantage International. “E-commerce is on the radar of Canadian retailers, but they’re way behind,” he maintains. “I think they’ve finally caught on, but they’ve just got so much to catch up on.”
Konings says that while most of the products sold online in Canada are books and music, many shoppers in England buy all their groceries online. “Because of what I’m seeing in other markets, I think e-commerce has reached a tipping point, and if Canada doesn’t get on board, they’re going to miss out,” he warns. On the positive side, he cites one retailer who said his company would be having serious discussions on e-commerce with vendors over the next 16-18 months. “So that tells me some of them are starting to take it seriously.”
I think e-commerce has reached a tipping point, and if Canada doesn’t get on board, they’re going to miss out” Dwight Konings, Advantage International
Retailers Rate Suppliers’ Performance
Average Net Favourable Rating
35
38
30 25 20 0
Business Relationship & Support
Personnel
September | October 2013
Category Development & Shopper Insight Support
Consumer Marketing Support
Customer Marketing & Promotional Practices
Logistics & Supply Chain Management
Customer Service / Support
TM
Relationships are improving… [between retailers and manufacturers] have become stronger. There is * “Relationships now more transparency as to what the requirements are on both sides, which makes it easier for us to work together.”
*
“Relationships have become stronger; over the past 18 to 24 months we have seen a transition to looking for a better solution for the customer. This results in increased sales for both the supplier and us. We do this with a collaborative approach; we discuss issues and share our experiences with other suppliers.”
the past year, customer–supplier relationships have become stronger. We have * “In had more communication, been in more meetings, and had more phone calls and open conversations than in previous years.”
have become stronger. The companies that understand our needs * “Relationships present programs that align with our strategies; these are executable programs.”
But more can be done need to be in tune with the pulse of our business and recognize that the way * “They we approach our business should be very different from that of other retailers. Vendors should understand our unique strategies rather than taking a global approach to all retailers.”
that are more successful collaborate with us on forecasting. They are * “Manufacturers open, honest, and upfront about any potential issues. They are proactive. We have
limited people with so many vendors, and the strong vendors are the ones who come to us with potential problems or issues they would like to see changed.”
must identify the areas in which they can help us manage excess inventory in * “They our stores. We would like support with reviewing slow-selling items and making
necessary order quantity adjustments. We would benefit from honest suggestions for how to meet our metrics, which would help ensure we receive the right items at the right time in the right store.”
fill rate is important. If we order 100, we expect 100. This correlates with the * “The forecast accuracy and knowing how your products are going to sell or going to react to a specific environment of the market.”
need to be in tune with the pulse of our business and recognize that the way * “They they go to business with us should be very different from other retailers. They should understand the unique strategies of our business, rather than taking a global approach to all retailers.”
grocerybusiness.ca
Q&A with Paul Cussons, Director, Client Services – Canada Grocery Business: What is The Advantage Report? Paul Cussons: The Advantage Report is an annual program that measures the business relationship of grocery and CPG retailers and manufacturers on specific metrics. We receive feedback from more than 1,000 head office respondents, including executive, senior, category, and inventory/logistics personnel. Participating retailers and distributors rate the performance of suppliers on a range of business metrics. We also conduct follow-up interviews with almost 400 respondents. GB: Why should manufacturers sponsor The Advantage Report? PC: To leverage the information in order to build a relationship with their customers based on how the retailers are asking manufacturers to perform. It’s an unbiased study, so the manufacturers can truly gauge how the retailers want to be treated and how they want their vendors to go to market. Founded in Canada in 1988, Advantage now operates in 38 countries. Its jointly sponsored programs provide an ongoing industry benchmark designed to enable retailers and manufacturers to measure, track, and ultimately strengthen their relationships with key business partners.
For more information, contact Paul Cussons at 416-863-0685, ext. 170; pcussons@advantagegroup.com.
September | October 2013
39
T&T Waterfront Night Market July 19-21, 2013 Cherry St., Toronto
All Night Long
T&T Supermarket’s annual night market is a summertime hit where visitors sample authentic Asian-themed street foods. By Angela Kryhul
O
ne of the notable foodie hits of
Annabel Lee, marketing director for event host
themed night market experience.
innovate new items each year so that the
this past summer was the AsianNight markets are crowded
and lively events where tens of thousands of people gather to mix and mingle, and to
sample authentic, Asian-themed street foods.
The summertime-only occasions that pop up
in such ethnically diverse cities as Richmond, B.C., Toronto, Ottawa and Markham, Ont., are modeled on popular night markets in places like Taiwan and Hong Kong.
T&T Supermarket hosts one of the more
robust such events at its Toronto Cherry Street location. Held this past July, the fourth annual
T&T Waterfront Night Market featured 110 food and general merchandise booths, a small midway, an Asian Film Festival, and a sports zone. A total of 80,000 visitors attended the three-
night event. T&T also debuted its first Ottawa night market in August, where 60 vendors
Power Unit Youth Organization. “Many vendors dishes are not easily found anywhere else.”
T&T’s annual Asian-themed night market
is an important part of the grocery retailer’s marketing strategy because it helps raise
awareness of the store brand among both
Asian and non-Asian customers, explains Paul Ho, T&T’s marketing manager, eastern region.
“We hold the night markets right in front of our stores for strategic reasons,” he says. “We invite people in so they can check out what we
have on the shelves.” Vendors are encouraged to
develop unique dishes that would, in turn, inspire visitors to pop into T&T to buy ingredients so that they can duplicate the dishes at home.
For T&T, night markets provide an important
cultural experience that reinforces its connection with the community.
explains Ho “and to provide entertainment,
of night markets. Two colossal markets – the
adventures.”
International Summer Night Market and the
Night markets are familyfriendly affairs where dozens of food entrepreneurs dole out affordable, sample-sized portions of such tasty treats as lamb skewers and teppanyaki squid. One can also find such imaginative fusion creations as kimchi with beef bulgogi poutine. Numerous Asian cuisines are represented: Korean, Vietnamese, Chinese, Japanese, Malaysian, and more.
“We’re here to take care of our customers,”
attracted 30,000 visitors over two nights.
It seems that urbanites can’t get enough
What is a Night Market?
enjoyment, excitement, and different types of
Richmond Night Market – run on summer
weekends in Richmond, B.C., and draw hundreds of thousands of visitors.
In Markham, Ont., the annual Night It Up
featured more than 100 vendors and attracted about 120,000 visitors over three nights, says
T&T Fast Facts
T&T is Canada’s largest Asian supermarket chain, with a total of 21 stores: nine in Greater Vancouver, two in Calgary, two in Edmonton, seven in the Greater Toronto Area, and one in Ottawa. T&T was founded 20 years ago by Jack and Cindy Lee, and acquired by Loblaw Cos. Ltd. in 2009.
40
September | October 2013
East Meets West PriceSmart Foods in Richmond, B.C., delivers a genuine ethnic and traditional supermarket experience while catering to the tastes of the evolving neighbourhood. By Lauren Kramer
f you’re looking for parking outside PriceSmart Foods in central Richmond, B.C., you’ll need pa-
tience, and lots of it. The 150-car
parking lot is jammed with vehicles and drivers competing for the first free spot.
Overwaitea Food Group (OFG) converted a
lagging Save-On-Foods store to the PriceSmart
banner in late 2011. The test concept has been a work-in-progress and OFG has worked hard to
product mix you might expect in a traditional Overwaitea grocery store.
The PriceSmart store is bustling with Asian
shoppers, and one of the busiest departments
is the deli where one counter sells ready-to-go dim sum, another stocks a vast assortment of sushi, and other counters feature packaged
meals – chicken karaage, goose feet with mushrooms and sour pork feet.
In a local newspaper interview, OFG president,
evolve the store mix so that it’s now more than
Darrell Jones, said the company realized it
product offering.
the local demographic which has, over the past
away from its traditional format was “a really
The PriceSmart store is located smack in the
not have survived,” Doucette says. By creating
50 per cent Asian foods alongside a traditional As the store’s busy parking lot attests, the
change is clearly resonating with Richmond
shoppers as they fulfill all their grocery shopping needs in one location.
The entrance to the 62,000 sq.ft. store opens
to aisle upon aisle of foods from China, the
Philippines, Korea, Vietnam, Japan and South Asia. Bags of rice are stacked on wooden
pallets, and aisle names in English and Chinese direct customers to such items as pork floss, ramen noodles and seasoned seaweed. Off to the extreme right of the entrance is the
needed to evolve the store mix to better serve
decade, seen an influx of Chinese immigrants. middle of east and west Richmond Centre.
“We’re quite unique in that we have a complete grocery mix,” he said, adding that the store’s
long-time customers embraced the changes, especially when they discovered that many
meal solutions have been added to the store mix as a result.
Jeff Doucette, a Calgary-based grocery
consultant and general manager of Field Agent Canada, says OFG’s decision to covert the store
smart move. If they hadn’t adapted it, it may a true hybrid that delivers a genuine ethnic
and traditional supermarket experience, all
under one roof, it’s clear that OFG understands the needs of this community.”
Grocers cannot afford to ignore what
makes their trading area unique, Doucette says. “Big retailers need to think more about a
community and who lives in it, rather than
about making sure every store offering is the same as the next.”
The richmond community
Richmond B.C. is a fast-growing city of 205,000 people.
»» According to the 2011 National Household Survey, almost
69 per cent of the total population are visible minorities.
»» Close to half of the city’s residents, or 91,890 people, are of Chinese heritage.
grocerybusiness.ca
September | October 2013
41
it figures > Ethnic Consumers:
Winning the Shopper of the Future The number of visible minorities will double while Caucasians will only grow 10%. Visible minorities will bring an additional $5 billion to Canadian retailers and manufacturers by 2017.
Takeaway Ethnic consumers represent a phenomenal opportunity for Canadian retailers - the sheer size and growth of this important consumer segment means you canâ&#x20AC;&#x2122;t afford to ignore them. Retailers need to expand ethnic product offerings and produce in the store to capitalize on growth.
56% of Asian consumers actively seek a demo in-store before buying Takeaway Asian consumers view grocery shopping
as fun, family time. They are more likely to have the entire family (three generations) on shopping expeditions meaning multiple decision makers. Offer Asian consumers a fun, engaging and interactive store environment with plenty of sampling and demos.
42
September | October 2013
56%
Ethnic consumers shop TWICE for groceries – once at an ethnic grocery store and once at a traditional banner store. Takeaway Multi-store shopping is preferred by the three largest ethnic consumer segments in Canada. However, different factors influence store choice. »» Asian shoppers show a preference for quick trips to replenish and buy a few essential items at a time. »» South Asian shoppers look for smaller store formats, personalized service, and a large assortment of Asian foods. »» Filipino shoppers put a premium on location, price, and hours of service when choosing a grocery store.
47%
o f Chinese consumers claim store brands are not suitable when quality matters
38%
o f South Asians feel that name brands are worth the extra price
28%
of Filipinos state that store brands have cheap looking packaging
Takeaway Ethnic consumers show a strong preference
for brand names. Chinese and South Asian consumers say they mistrust private-label products due to quality concerns and because they are unfamiliar with store brands in their home countries. Attract ethnic consumers to your store by highlighting national brands.
28% of Chinese 43% of Indians 39% of Filipinos say they are willing to pay more for a private-label brand if they like it Takeaway Introduce your ethnic consumer to private-label products through in-store sampling.
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 courtes y: N ielsen
grocerybusiness.ca
Carman Allison
September | October 2013
43
CANADA’S
PREMIER NATIONAL
GROCERY
A better Reach A better Read A better Value
MAGAZINE grocerybusiness.ca
To reach retailers through Grocery Business magazine contact: Kevin Smith • 416-569-5005 • kevinsmith@grocerybusiness.ca
Sept | Oct 2013
Produce Manager
Colemans Watermelon promotion
Carol Anne Mitchell with Corey Conrad, produce manager, Colemans At The Gardens, Corner Brook
Two southern belles got the royal treatment when they visited Colemans grocery stores in Newfoundland this past summer to promote one of the most refreshing fruits of the season. Amber Nolin, the 2013 Miss Alabama National USA Watermelon Queen, made appearances at Colemans stores in St. John’s and Mount Pearl. Carol Anne Mitchell, the 2013 Miss Georgia Watermelon Queen, visited Colemans stores in Corner Brook, Deer Lake and Stephenville. Watermelon displays at the Mount Pearl store
Amber Nolin with St. John’s store baker Derrick Newhook
Amber Nolin at Colemans’ St. John’s location
Carol Anne Mitchell at the Corner Brook store
grocerybusiness.ca
September | October 2013
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CE U D PRO
R O D VEN
R O S ADVI ES DAT
SPONSORED BY:
HUGE SALES GROWTH IN CANADA Natural Delights Medjool Date Sales to Canada
34.7%
$6.7 Million
VOLUME GROWTH IN 2012 *
Natural Delights Medjool Dates Medjool dates have a lot to offer: a melt-in-your-mouth caramel taste and a chewy texture; amazing versatility; lots
NATURAL DELIGHTS IN CANADA
17.5
%
$3 Million
ANNUALIZED
of antioxidants; a lovely amber colour and easy portability. Yes, even though these Medjools are a fresh—not dried—date, they can be enjoyed anywhere, anytime. Medjools are grown today in the Bard Valley straddling California and Arizona, and these dates flourish there because they need a hot, dry
GROWTH OVER THE LAST 5 YEARS
123
%
2007-2008
2011-2012
* IRI/Nielsen
climate with plentiful groundwater.
Datepac Datepac, LLC is the largest Medjool date packing and marketing facility in the US. The Natural Delights Medjool Date of the Bard Valley. Benefitting from an
FAMILY IS EVERYTHING
ideal climate and the nearby Colorado
More SKUs = more customer trial more often
River, this area produces the finest
Research proves that a sale’s lift occurs—even when
Medjool dates year after year. Datepac
sold at a higher price point—when carrying a larger
industry is based in Yuma, AZ in the heart
was established in 2002 to consolidate the packing of Medjool dates for the Bard Valley Medjool Date growers. This consolidation enhances the quality of dates produced and distributed throughout the world.
family of Natural Delights SKUs, and merchandising and promoting them. Natural Delights Medjool
40
T PRODUC s U K S
Dates are available in a wide variety of grades, packages, sizes—including 11 lb. bulk boxes, 1 lb. tubs, 12 oz pitted dates and date rolls, organic product and Snack Packs—designed to appeal to different customer segments.
RAMADAN AND MEDJOOL DATES Canadian Muslims predicted to triple over the next 20 years Dates are an important part of breaking the Ramadan fast each day for about a million Canadian Muslims. And the Medjool—the King of Dates—is the variety favoured by many Muslims because they are the largest, sweetest and most moist date. There is a huge opportunity here to boost Natural Delights Medjool Date sales during Ramadan, which next occurs from June 28 to July 27, 2014.
2013 MUSLIMS IN CANADA
2030 ESTIMATE IN CANADA
2.8%
6.6%
940,000
2.7 million
of population
of population*
* The National Post, Jan. 31, 2011
119%
178%
50%
147%
ORGANIC DATE ROLL ALMOND
ORGANIC DATE ROLL COCONUT
ORGANIC MEDJOOL TOTAL
ORGANIC DATE ROLL TOTAL
MEDJOOL MERCHANDISING Place Natural Delights Medjool Dates on, or near, banana tables and with the fresh cut or value-added fruit sections.
Use floor standing shipper/displayers for:
Datepac LLC
• October to December holiday lead-up • Easter and Passover • Ramadan in June and July
Talk about organic growth… Some of the biggest growth for Natural Delights has been in the Organic category. Customers are looking for a range of organic whole dates and organic date rolls. Between 2012 and 2013, organic SKUs of Natural Delights have grown between 50% and 178%.
IT’S A DATE! • BULK • SNACK PACKS • WHOLE & PITTED • CONVENTIONAL & ORGANIC • DATE ROLLS Coconut Almond Pistachio Chili Lime
Unlike o date vari ther Medjool Deties, are not p ates ri sensitive ce .
CE U D PRO
“The customer is always right” is the old adage,
R O D VEN
and what the customer wants is choice, especially when it comes to tomatoes. Rounding out your tomato category with field-grown makes sense when you look at a Leger
R O S ADVI
Marketing research survey conducted in 2012 amongst Canadian shoppers (highlights below). Tomatoes from California Tomato Farmers, a cooperative of family
ES ATO M O T
farmers who focus on food safety and sustainability, are the perfect fit for every produce department. Find a shipper at www.ctf-canada.com trade.
SPONSORED BY:
CANADIAN CONSUMERS PREFER FIELD-FRESH TOMATOES
68% of Canadian grocery shoppers believe that there is a taste difference between field-grown and hothouse tomatoes. Of that group
62% believe field-grown tomatoes taste better.
CONSUMERS WANT CHOICES Which of the following are important factors in-store when you purchase tomatoes? Multiple types of tomatoes to choose from
60%
Tomatoes I always purchase/trust
53%
In-store displays that are well maintained
45%
In-store sampling
11%
Recipes available
8%
Educational materials available
4%
None of the above
9%
42%
s sumer of con ORE for M Y will PA rown round field-g atoes tom
CANADIAN SHOPPERS’ PREFERENCE ON TOMATOES
88% 12% UNITED STATES
MEXICO
Flavour. Body. Versatility. y y. Fresh field-grown tomatoes from California have the flavour and body or â&#x20AC;&#x153;Meatinessâ&#x20AC;? that make them ideal for professional chefs and home cooks. Learn more about why Canadian consumers prefer field-fresh tomatoes and our harmonized food safety program at ctf-canada.com/trade.
HOW DO CANADIAN SHOPPERS SERVE TOMATOES AT HOME?
89%
Salads
82%
Sandwiches
70%
Burgers
67%
Ingredients
37%
Snacks Side Dishes
3%
(Leger Marketing, California Tomato Farmers Canadian Consumer Survey (Online) July 10th, 2012)
www.ctf-canada.com
What is the consumer looking for when it comes to fresh?
Produce Manager
fresh for the future
• Great flavour • New tastes • Assurance of safety • Quality and freshness • Variety • Greater transparency regarding food origins, nutrition and usage
As president of the Produce Marketing Association, Bryan Silbermann represents nearly 3,000 companies from every segment of the global produce and floral supply chain. Silbermann shares his perspective on industry trends and what to expect at the 2013 Fresh Summit Convention & Expo, taking place October 18 – 20, in New Orleans.
Bryan, you joined PMA 30 years ago, what are some of the major shifts in the industry you’ve seen over that time?
• Certainly much more of a consumer focus • Huge advances in packaging technology • Increased value-added (i.e. fresh-cut, convenience)
• Offerings that include better protection for
• Improved marketing messages • Much greater use of technology – all the way from the farm to the consumer
• Far greater globalization in terms of
sources of supply and knowledge transfer
the product
What major trends do you see in the produce category?
• Much more convenience built into the product. • Locally grown appeals tremendously to consumers – grocers are
trading on the value that consumers place on locally-grown produce.
• As our world becomes more high tech, consumers increasingly want
the high-touch of the fresh/unprepared side of fresh produce. This is very appealing to them.
• Consumers definitely are looking to expand their horizons of flavours. They’re trying different foods, and you can see how this has driven the globalization of supply.
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September | October 2013
• Growth and demand for organics has slowed a bit, but continues.
What excites you most about the future of the industry?
1
The power of inexpensive connections to consumers made possible by social media – this is revolutionizing marketing budgets.
3
2
The fabulous young talent being attracted to the industry thanks, in part, to the efforts of the PMA Foundation for Industry Talent.
Rethinking the way we do business. For example, the huge interest women have in getting involved in more senior leadership roles. This was evidenced by the overwhelming popularity of the PMA Foundation’s Women’s Fresh Perspectives Conference.
Fresh Summit is PMA’s annual trade show and conference. Silbermann discusses what exhibitors and attendees can expect this year in New Orleans. Fresh Summit is the largest fresh fruit and vegetable trade show in this hemisphere, so we’ve taken steps to help simplify and focus the attendee experience. For example, educational workshops are concentrated on Friday; it’s one day organized into three series. We’ve also scheduled fewer workshops that offer more in-depth information focused on three areas of interest:
• Global connections • Industry talent • Science and technology
Within the destination is the New Products Showcase, a series of displays that spotlights exhibitors’ new products and services. For the first time, the showcase will include a Digital Innovations section to highlight novel uses in digital technology designed to move the produce industry into the future.
Why is it important for Canadian retailers to attend?
These areas can help attendees tailor the whole Fresh Summit experience to meet specific business priorities. We’ve developed PMA’s new Innovation @ Work destination where the latest innovations in technology, packaging, merchandising and more are displayed.
With 20,000+ attendees from more than 60 countries, and 900+ exhibiting companies, Fresh Summit provides many opportunities for Canadian attendees to network with retailers from around the globe to discuss best practices and learn from one another. That’s why Oleen Smethurst, of Costco Canada, will be joining the PMA Board of Directors in October. She is already the vice-chair of our Global Development Committee – a role that reflects the importance of imported produce to Canadian retailers.
Cathy Green Burns joins PMA The Produce Marketing Association (PMA) has announced that Cathy Green Burns will join the organization as president, effective December 1, 2013. In this new role, which further strengthens the staff’s blend of association management and industry expertise, Green Burns will focus initially on leading board and staff team development as well as lending her insight to business development activities. In her new role, Green Burns – who previously was president of Food Lion, in the U.S. – will report to PMA chief executive officer, Bryan Silbermann.
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CE U D PRO
W
atermelon is increasingly recognized as not only a delicious and refreshing treat, but as a healthy, must-have part of a well balanced diet. Research from around the globe is making it clear that the healthful attributes of watermelon are such that it should be consumed yearround and not just in the summer. Consumers in both Canada and the US are part of this trend and eating more watermelon whenever it’s available. While the US is the largest supplier of watermelon to Canada during the spring and summer months, Canadian growers are increasingly joining the party with late season production in Ontario and BC. With winter and early spring watermelon coming north from Mexico and Central America, watermelon is becoming a truly continental product for all of North America. For further information on all aspects of watermelon please visit the National Watermelon Promotion Board’s website, www.watermelon.org.
R O D VEN
R O S I ADV NS
ELO
ERM WAT
U.S. Watermelon Exports to Canada & Trend, in Pounds, 2008 - 2012
SPONSORED BY: NATIONAL WATERMELON PROMOTIONAL BOARD
350
339
335
340 330 Millions
BETWEEN 1970 - 2009: The world watermelon production went up 4 times:
320 310
303
305 292
300
18 TO 88 MILLION TONS
290 280
International trade grew 10 times:
270
212,000 TO 2,3 MILLION TONS
260 2008
2009
2010
2011
2012
Source: Foreign Agricultural Service Created by: Jason Hanselman, NWPB Date: 7/25/13
6.0
American Per Capita Consumption Five-Year Trend and Total Pounds Lbs
Billions
25.0
Per Capita Consumption Trend
5.0
20.0
4.0 15.0 3.0 10.0
2.0
5.0
1.0 0.0
1950 ‘51 ‘52 ‘53 ‘54 ‘55 ‘56 ‘57 ‘58 ‘59 ‘60 ‘61 ‘62 ‘63 ‘64 ‘65 ‘66 ‘67 ‘68 ‘69 ‘70 ‘71 ‘72 ‘73 ‘74 ‘75 ‘76 ‘77 ‘78 ‘79 ‘80 ‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 2012 Source: Economic Research Service. Created by: Jason Hanselman, NWPB Date: 7/25/13
0.0
Did you know that a watermelon can feed 3 dozen people?
Enjoy a healthy lifestyle every month of the year with the sweet taste of watermelon. Packed with vitamins A and C, the antioxidant lycopene and the amino acid citrulline, it's great for the whole family from children to grandparents. Look for healthy watermelon recipes your family can make together at Scan code for instant access to Watermelon Selection, Health and Recipe Information
watermelon.org.
While many factors affect heart disease, diets low in saturated fat and cholesterol may reduce this risk.
A taste of CALIFORNIA...
Grilled Indian Spiced Pork Emphasizing vegetables and fruit is part of healthy eating. California Cling Peaches financially supports the Health CheckTM Program. This is not an endorsement. See www.healthcheck.org 130 g (1/2 cup) Cling Peaches in light syrup: 80 Calories, 0g Fat, 20g Carbohydrate, < 1g Protein.
Bring the taste of California to your table with quality canned California Cling Peaches! •
Convenient and economical, especially when fresh fruit is not in season.
•
We start with the freshest California Cling Peaches - hand sorted and quality inspected.
•
They are harvested and canned at their peak, sealing in their valuable nutrients and fresh taste.
•
California canned fruits are packed in either juice or light syrup with absolutely no additives or preservatives used in the canning process.
•
The canning process is one of the safest forms of packing – the high heat and vacuum seal prevent micro-organisms that cause food-borne illness.
For more recipe ideas visit the California Cling Peach Board at:
www.calclingpeach.ca
A participant of Heart & Stroke Foundation of Canada’s Health CheckTM Program
C-Suite
interview: denis gendron In the wake of recent industry changes, Grocery Business Executive Editor, Karen James, spoke with Denis Gendron, president of United Grocers Inc., about the organization’s current initiatives and future goals. Karen James: You are beginning your third year with UGI. What do you consider your most notable accomplishment? Denis Gendron: I believe our most notable accomplishment, to date, is the implementation of our new mission. When I joined UGI in July 2011, the Board members’ expectations were to have us extend our activities to all fresh areas. At the time, I suggested that we should also consider where we could find savings and efficiencies by leveraging the size of the group – areas such as equipment and services. We are still in the early days of this new mission, but after the first 12 months, we have many new suppliers in all areas, and discussions with others under way. Another key element is the UGI team. We are a small group that works efficiently, and we constantly review our processes. We’ve been able to add many new projects – in private label, fresh departments, supplies, and other areas without adding any resources.
total market inclusive of all channels, UGI has a 23 per cent share of the industry. This means that our members serve close to 25 per cent of the Canadian population from coast-to-coast. KJ: The Canadian grocery retailing market is changing rapidly. What opportunities do you see for UGI?
KJ: What is UGI’s market share?
DG: It`s an interesting question. When I see comments made regarding UGI, there seems to be some concern about its future. For me, and for our team, a few things are very clear. UGI has been operating for 41 years. We’ve had many years of success and have had some challenges. However, the members who faced these challenging periods worked together and were able to bring UGI to its current level. Now, it’s our job to focus on bringing UGI to the next level. The Board members are committed to growing the membership, and the UGI team is working to achieve that objective. If we are at 23 per cent of market share today, it means there’s another 77 per cent of potential growth for UGI. This is our focus.
DG: If we look at the grocery channel only, UGI has a 34 per cent market share. If we look at the
KJ: What does this mean for your vendors? DG: We want to help suppliers grow their
grocerybusiness.ca
Denis Gendron, president, UGI Inc.
volume with our members and gain the benefits of these win-win partnerships. KJ: Beyond CPG products, are there other opportunities to find cost savings for your members, for instance, within their operations? DG: Yes, many opportunities are available, and we’re working on several of them. Our first major project was credit and debit transaction fees. We just finalized an agreement with Avis and Budget car rentals. We have a few projects in discussion with Canada Post and others on mobile services, courier costs, and freight cost initiatives that will benefit both our members and our suppliers. KJ: What do you consider UGI’s greatest strength? DG: It is definitely the level of member participation, their engagement and commitment on execution. If UGI has been successful over the last 41 years, it’s because of our members.
September | October 2013
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list it
New and now products
Monjes de Lontue
Don Rafael Olives presents Monjes de Lontue Extra Virgin Olive Oil. Made with a blend of olive varieties, its aroma evokes green tomatoes, and the taste delivers herb and olive notes. Now available in Canada. donrafael.cl/english
The true taste of Italy
Introducing Italy’s favourite fresh mozzarella. Galbani has been crafted in the fior de latte tradition for over a century and the result is a uniquely soft, moist texture and creamy melt-in-your mouth taste. Galbani: A proven way to drive your deli sales. galbani.ca
Spread the Word! Black Diamond cheese, with 80 years of quality cheese-making in Canada, brings you NEW Black Diamond Cheese Spreads. This “unique-to-category” cheese spread is incredibly versatile and has a deliciously rich taste. It can be enjoyed on its own or as an ingredient to enhance recipes. Conveniently packed in a re-closable container, Black Diamond Cheese Spread will become a new family favourite. blackdiamond.ca
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September | October 2013
Eat smart. Live happy Galaxy Nutritional Foods, the #1 cheese-free choice, is now GO Veggie!™ We empower people seeking a healthier lifestyle to say “Yes!” to the delicious, cheesy foods they love by providing a line of lactose- and dairy-free products. Call 800-808-2325 option 8, or visit goveggiefoods.ca
Fine quality basmati in a new convenient format
Indulge at home! Lactantia, with its long-standing history of dairy expertise, is expanding its family of delicious tasting products. Experience the richness and decadence of the new Premium Flavoured Milks, available in Dark Chocolate and French Vanilla. Enjoy new cool and refreshing Premium Iced Coffees available in Original and Mocha, made with 100 per cent Premium Arabica Beans and preservative-free. At-home indulgence, anytime, all year long! lactantia.ca
grocerybusiness.ca
Tilda Steamed Basmati rice is pre-steamed and can be heated in the microwave in just two minutes. Available in four flavours – Pure, Wholegrain, Pilau and Mushroom – they are made from natural ingredients, gluten-free and are suitable for vegetarians. nationalimporters.com
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list it With only 50 calories/100g serving, Source Greek offers 2x the protein of regular Source, has no sugar added, and is a stirred yogurt with a thick texture. Offer it today and drive your yogurt profits!
So much is new and tasty from General Mills and Yoplait! With a variety of tasty new flavours, Yopa! offers all the goodness there is to love about Greek yogurt with only 80 calories/serving. It’s made with real fruit, has no artificial flavours or colours, and no gelatin. It has 2x the protein of a regular yogurt, is fat free, and cholesterol free
Cereal is by far the #1 food eaten by Canadians at breakfast, enjoying a household penetration rate of over 92%. Households buying cereal spend 33% more total Grocery dollars in a year than non-cereal households – and when cereal is in the basket on a trip, the basket spend doubles.
General Mills introduces ground breaking innovation with these 2 new tasty protein bars from Nature Valley and fibre 1. Nature Valley Protein bars offer the protein you need, with the taste you crave. With two tasty flavour options, it’s a delicious chewy bar loaded with real nuts and 11 grams of protein per bar. fibre 1 Protein bar is a deliciously magical combination of fibre and protein. It’s a chewy snack bar with the feel-good benefits of both fibre and protein, loaded with caramel and peanuts, or creamy peanut butter, all covered in an indulgent chocolatey coating. It offers 6-7 grams of protein per 33 gram bar, and 20% of your daily fibre.
Be sure to grow your basket ring sales with these 2 new fabulous cereals from General Mills
Honey Nut Cheerios Hearty Oat Crunch
The #1 brand in cereal is expanding with a new variety! Honey Nut Cheerios Hearty Oat* Crunch provides the fun of Honey Nut Cheerios, combined with oat flakes, and oat & nut clusters. Your customers already enjoy Honey Nut Cheerios; put this great new cereal on the shelf and add some crunch to their day!
Fibre 1 Almond & Cluster Delight
You won’t believe fibre can taste this good! From the fibre 1 brand, comes a perfect cereal that’s crunchy, with just the right sweetness, and just the right amount of almonds. Consumers are nuts about the taste!
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September | October 2013
Sponsored page
Making It
Eau Canada By Don Douloff
At the recent Specialty Food Show in New York, Grocery Business met a Montreal brother-and-sister team who have turned waste maple water into a sophisticated bottled beverage
In business, “aha” moments can strike under the least likely of circumstances. Such was the case with Élodie and Mathieu Fleury. For the last 15 years, their parents have company, Eau Matelo, with Élodie as president operated a sugar shack in Saintand Mathieu as general manager. Valentin, Que., about 60 km south The pair put their vocational talents to of Montreal. work. Élodie handled the legal aspects of Whenever possible during the launching the business and Mathieu, a spring maple syrup season, the chemical engineer specializing in food siblings would help out, with Élodie, and beverage processing, drew on his skills who worked in New York as an to perfect the product. international financial lawyer from That start-up process took 18 months and 2004 to 2008, lending a hand on in 2011, to test the market, Élodie sold bottles visits back to her native Montreal. of De L’Aubier to about 20 high-end And then the gods of serendipity – in Montreal restaurants. Customers responded the form of the sugar shack’s sulphurous, Siblings Mathieu and Élodie Fleury enthusiastically. unpleasant-tasting tap water – intervened. Wasting no time, Élodie , in 2012, drew up a detailed “During the maple harvest season, we started drinking business plan, finalized the sleek, contemporary bottle design the filtered, sugar-free leftover sap water as a substitute for and officially launched De L’Aubier. our tap water, only to realize very quickly that it was delicious and had a very soft and round mouth feel, with a In Quebec, De L’Aubier (which means “from the sap wood”), is now soft, green palate,” recounts Élodie. available in upscale restaurants, hotels, specialty food retailers and about They were following the lead of their French grandfather, a dozen Metro and IGA stores. who, for years, had enjoyed the sap water during family dinners at the sugar shack. Élodie said De L’Aubier would land on the shelves of In April, 2009, their grandfather died, and on their way Toronto’s high-end Pusateri’s Fine Foods and McEwan back from France, where they’d attended his funeral, “we specialty store by September. Another key target is the U.S., decided that we would turn this special water into a where De L’Aubier has caught the attention of Costco and business venture,” remembers Élodie. Whole Foods. Given the water’s initial success and huge And thus was born De L’Aubier, a high-end bottled water potential, it’s no surprise to learn that, in March 2013, Élodie that’s suitable on its own or as a palate cleanser during gave up law to focus full time on De L’Aubier. meals. In 2009, Élodie left New York and moved back to Her grandfather would approve. Montreal. Later that year, the siblings founded their grocerybusiness.ca
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Custom Publishing with a fresh take quality content + award-winning design
OUR TURNKEY SERVICES INCLUDE: • Professionally written and edited content • Custom photography • Award winning graphic design • Account management • Top quality printing • Distribution • Promotion
If the medium is the message and the brand message is quality, then choose Grocery Business Publishing
CONTACT:
Kevin Smith 416-569-5005
Karen James 416- 561-4744
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kevinsmith@grocerybusiness.ca
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Welcomes These New Suppliers united grocers inc.
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September | October 2013
Perry’s Point of View
Survivor: Grocery Store The television series Survivor is clearly running out of locations, so maybe it should turn its attention to the grocery and drugstore scene in Canada. The “Consolidation Playbook” for 2013 has not gone exactly according to plan, but for suppliers serving Sobeys, Safeway, Loblaw, Shoppers, HBC, Saks, McKesson, Katz Group, AmerisourceBergen, and Kohl & Frisch, the new consolidating distribution world has turned into a quagmire of danger and drama. Just like the cast on Survivor, suppliers need to maintain positions, create alliances, shaft competitors, and find routes to glory. Threatening suppliers’ survival are the ominous synergy numbers that acquiring companies promise investors. These firms tend to pay acquisition multiples higher than what they themselves are worth, which means that, unless they find synergies, earnings will deteriorate. There are many sources of synergies – some easy, some difficult, and some just wishful. Some can be dangerous. The difficult synergies involve buildings, logistics, and people. It can take years to properly align multiple organizations and distribution centres and offices. Cuts made too early can impact sales and effectiveness. The wishful synergies involve a hope that sales might increase because of cross-pollination of products and programs. But for suppliers, the most dangerous synergies are the so-called easy ones, whereby retailers demand lower costs or higher rebates from vendors. For acquiring companies, these grocerybusiness.ca
easy synergies typically represent the vast majority of first-year savings as retailers seek hundreds of millions of dollars from suppliers in order to meet new earnings targets. Unfortunately for suppliers, there generally is not much offered in return – except survival. These funds have to come from somewhere. Consequently, retailers not involved in consolidation fear that the synergies will come from their funds, and so they often develop “ask” programs of their own, or even make modest acquisitions to get in the queue for funds. As a result, the profitability of consumer packaged goods companies in Canada is likely to be materially lower in the next 12 months as they spend to survive. In the long term, contributions from suppliers toward acquisition synergies eventually end up back in invoice pricing, reduced promotional programs, or some other form of effective cost increase. Retailers would be naive to assume otherwise, but they are concerned only with achieving near-term financial expectations. In order to survive these challenging circumstances, suppliers can take a lesson from the TV show:
The real winners will be suppliers who turn this situation into an opportunity for growth. They can do this by advising on other types of synergies – ways to cut distribution or administration costs, or boost sales in the acquired company. The new larger retailers and wholesalers are not just under the gun to produce
»» Choose alliances carefully; »» Know your strengths and weaknesses; »» Make intelligent trade-offs; and »» Don’t be afraid to sacrifice a competitor or colleague along the way.
Perry Caicco is the managing director for
The real winners will be suppliers who turn this situation into an opportunity for growth. targeted operating profits. Investors will be looking at whether these companies can also deliver same-store sales growth, more efficient capital programs, and differentiated strategies. Emptying your pockets keeps you in the game, but helping these new large companies actually improve day-to-day performance can generate real growth. Survivor: Amazon is a piece of cake compared to this.
CIBC World Markets. He has worked for 15 years in the supermarket, general merchandise, and packaged goods industries with Loblaw Companies, Coca-Cola, and Consumers Distributing.
September | October 2013
65
ance Program-at-a-Glance Program SUNDAY
MONDAY
29
30th
SEPTEMBER
th
SEPTEMBER
Meeting (For CFIG
GROCERY INNOVATIONS CANADA TRADE SHOW
Members Only)
Noon – 5:00 pm
1:00 pm CFIG Annual General
Intercontinental Toronto
Centre Hotel 5:30 pm Grocery Innovations Canada Welcome Reception (Open to ALL Attendees
and Exhibitors)
Intercontinental Hotel
Ballroom B
Trade show features: • Choose Ontario Retailer Forum • First Time Exhibitors Pavilion • Sustain Lane • Enhanced New Product Showcase • Connection Lounge • 9th Annual Canadian Best Bagger Contest • 4th Annual Top 10 Most Innovative Products Contest
CONFERENCE: MTCC, Constitution Hall
7:30 am
8:30 – 9:30 am
Opening Speaker – Chris Cummins
KEYNOTE: Marc Poulin, CEO, Sobeys
10:15 –10:45 am
Coffee break
10:45 am
Marc Poulin
Breakfast
Fresh Food Panel: Consumer and Market Trends
11:45 am
Luncheon of Honour (Full Delegates Only & Invited Guests)
EVENING EVENT
6:45 pm
Join us at the Grocery Innovations Canada’s “Explore the World” party at the Steam Whistle Brewing Roundhouse.
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September | October 2013
Metro Toronto Convention Centre
September 29th to October 1st, 2013
rogram-at-a-Glance Program-at-a-Glance TUESDAY OCTOBER
1
st
GROCERY INNOVATIONS CANADA TRADE SHOW
Tom Barlow Peter Larkin
10:00 am – 3:00 pm
CONFERENCE: MTCC, Constitution Hall
7:30 am Breakfast - MTCC Room 104
8:30 am Super Panel: The Future of Online Grocery. Moderated by Tom Barlow, President & CEO, CFIG Tom Furphy, CEO and Managing Director, CEP and former Vice President, Amazon Fresh Stephen Tallevi, Co-Founder and General Manager, Grocery Gateway Peter Larkin, President and CEO, National Grocers Association Chris Coborn, CEO and President, Coborn’s Inc., St. Cloud, Minnesota 9:45 am
Enhancing Business Performance through Innovative Labour Solutions: Mark Wafer, Tim Hortons Franchise Owner; Joe Dale, Rotary Club of Whitby.
EVENING EVENT Come out for a night of honours and recognition at the 51st CFIG Award of Merit Dinner followed by the Canadian Independent Grocer of the Year Awards gala. 5:00 – 5:45 pm
Award of Merit Reception (invitation only) – MTCC, Room 104
5:45 – 6:30 pm
Pre-dinner Reception – MTCC, Room 104
6:30 – 7:30 pm
Award of Merit Dinner – MTCC, Constitution Hall
7:30 – 10 pm
grocerybusiness.ca
Awards presentation – MTCC, Constitution Hall
September | October 2013
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