January/February 2014 by Grocery Business

January February 2014 Vol 4 | No 1 $9.95

Trends with Traction

THE THE FUTURE FUTURE ISSUE ISSUE Whatâ&#x20AC;&#x2122;s the future of centre store?

+ Merger

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Perry Caicco

Mash-Up

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2013 THIS IS THE YEAR

THAT WAS

Grocery Business January | February, 2014 Volume 4, Number 1

ON THE COVER

19 The Future Issue

If 2013 was the year of the acquisition, 2014 is the year of the merger. Perry Caicco analyzes the effects of the mergers on the industry in 2014.

contents

M 24

January | February 2014

22 FEATURES

DEPARTMENTS 4 2013: This is the Year

56 Launch it, List it

15 Shakeup in Aisle 8

8 Front End

64 It Figures

20 Trends with Traction

that Was

People & News

11 Open Mike

First Impressions… Lasting Memories!

32 Shelf Life: Reeling in

Seafood Sales

New and Now Products Focus on Loyalty Programs

28 extra Special

What’s the future of centre store?

23 McCormick Flavour Forecast

Marc Poulin reveals Sobeys’ new store strategy

PLUS

59 BrandSpark Canadian Shopper

Clorox celebrates its 100th Anniversary

Study 2014

62 Golden Pencil Awards

What Millennials Want The future of retail… Part 2

IPSOS: Catch Them While You Can

The time is ripe to connect with Millennials

Four Generations in the Aisle

32 grocerybusiness.ca

January | February 2014

Front End

Transitions John Welling has been appointed senior vicepresident of operations for Walmart Canada. Previously, he was a SVP for Walmart Japan Food & Consumer Products of Canada (FCPC) has promoted Errol Cerit to the position of vice-president, industry affairs, from his previous role as senior director, industry affairs. FCPC also hired Maisie Vanriel as vice-president, scientific and regulatory affairs, food policy. Her previous experience includes roles as a public health dietitian with the Region of Peel, and a corporate dietitian with Cara Operations Limited. Robert Sobey has retired as president and CEO of Lawtons Drugs, a position he held for the past eight years. Sobey will continue to serve on the board of directors of Empire Company Limited. Vivek Sood was promoted to the role of general manager of Lawtons Drugs, from senior vice-president.

Nestlé Purina PetCare Canada has promoted Jeff Hamilton (left) into the position of president. Purina Canada also promoted Todd Cooney to vice-president, general manager – generating demand, from his previous role as vice-president, sales. After 32 years with Nestlé Purina PetCare Canada, Karen Kuwahara retired at the end of 2013. Kuwahara was president of the company for 13 years. Peter McMahon is the new CEO of Shopko, a Green Bay, Wisconsin-based general merchandise retailer. McMahon most recently was the chief operating officer of Loblaw Companies Ltd.

Unilever Canada; and Grant Froese (right), chief administration officer for Loblaw Companies Ltd. Nancy Messham recently joined Brand Marketing and Communications Group in an account management and business development role. Messham is known for her recent work developing the Heart and Stoke Foundation’s Health Check program. Brandt C. Louie (right) assumes the role of president and CEO of London Drugs and TLD Computers, in addition to his role as chairman, upon the retirement of Wynne Powell (left) from those positions. Clint Mahlman, chief operating officer of London Drugs, has assumed the additional title of executive vice-president.

GS1 Canada has appointed two new executives to its board of governors: John LeBoutillier (left), president and CEO of

Donald Sobey

receives the Order of Canada Donald Creighton Rae Sobey, Chair Emeritus of Empire Company Ltd., has been named to the Order of Canada for his contributions as a philanthropist and entrepreneur, notably for founding the $50,000 Sobey Art Award, one of Canada’s leading awards for young artists. A director of Empire since 1963, president of the company from 1969 to 1986, and a director of Sobeys Inc. since 1998, Sobey is the founder of the D&R Sobey Scholarship Fund at Queen's University, past chair of the National Gallery of Canada, past chair of Maritime Telegraph & Telephone, and past director of the World Wildlife Fund.

Bron Sarabun has joined Brand Momentum Inc. as national client services manager. Sarabun previously worked for H.J. Heinz Company.

Welcomes the following January | February 2014 Volume 4, Number 1 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

January | February 2014

Contributing Editors Angela Kryhul, Sally Praskey Contributing Writers Peter Diekmeyer (Montreal) peter@peterdiekmeyer.com, Marjo Johne Contributors Perry Caicco, Michael Marinangeli, Catherine Yuile

@grocerybusiness Creative Agency Boomerang Art & Design Inc. boomart.net Subscription changes & updates or general inquiries: info@grocerybusiness.ca Grocery Business Advisory Council Phil Donne, Campbell Company of Canada Tom Barlow, Canadian Federation of Independent Grocers

Perry Caicco, CIBC World Markets Chris Terrio, CROSSMARK Canada Inc. Nancy Croitoru, Food and Consumer Products of Canada Tim Berman, Kraft Foods Canada Michael Marinangeli, MIDEB Consulting Inc. Cheryl Smith, Parmalat Canada Mark Ayer, Procter & Gamble Inc. David Wilkes, Retail Council of Canada Cori Bonina, Stong’s Market

new vendors

© Copyright 2014. 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 Mailing Address Grocery Business Media 390 Queen’s Quay W., PO Box 40085 Toronto, ON M5V 3A6

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Open Mike

Front End

GRENFELL MEMORIAL CO-OP

CELEBRATES A CENTURY OF SERVICE By Sally Praskey The St. Anthony Grenfell Memorial Consumers Co-operative Society in Newfoundland recently celebrated its centennial. One of Canada’s oldest consumer co-operatives, it began as a Spot Cash store back in 1908 before becoming a Co-op in 1913. Grenfell Co-op is named in memory of its founder, Dr. Wilfred Grenfell, who died in 1940. Believing the local fishermen were not getting a fair deal with the merchants, the physician started the co-op movement in northern Newfoundland and Labrador. “Dr. Grenfell was a humanist and a great community leader,” says Léo LeBlanc, corporate secretary and vice-president of human resources and corporate affairs at

Co-op Atlantic. “He established the The current Grenfell Co-op was built in 1978 behind the former store, foundation for co-operative efforts known as the Clock Shop due to its distinctive clock tower that would be embraced by the people of St. Anthony.” While Grenfell Co-op suffered financial To mark the milestone, the store held a hardships in the 1930s due to competition series of community events and promotions and new regulations that forced it to buy back throughout the summer. the shares of non-residents, it survived and “It is a privilege to be a part of Grenfell eventually thrived. The Co-op now boasts Memorial Co-op’s family,” says manager Boyd some 3,500 members, up from the original 28 Manuel. “The fact that the oldest consumers’ shareholders. co-op in Newfoundland and Labrador is in our In 1978, the Co-op moved into its current area is something we should all take pride in. building behind the former store (known as It is a part of our heritage, as well as a part of the Clock Shop because of the distinctive clock Dr. Grenfell’s legacy.” tower) and began selling more groceries. It has undergone several renovations over the years.

First impressions... Lasting memories! By Michael Marinangeli

The grocery industry is experiencing pressures not seen in more than three decades. We’ve gone from the land of milk and honey just a few years ago to a rapidly changing and far more competitive environment.

Today’s retailers are facing many challenges – new entrants, channel blur, industry consolidation, ethnic store growth, ad matching, changing demographics, online shopping, square-footage growth, deflation, and smartphone apps, to name just a few. For many retailers, this is uncharted territory. In the previous decade, we had a robust economy, a healthy consumer market, and fewer competitors vying for consumers’ dollars. Sales and margins headed in one direction only. Up! The rapid expansion of discount was lucrative and viable, since the conventional stores owned the discount formats and could control both sides of the equation when it came to margins and price gaps. Over the past five years, however, competitors with deep pockets and a venue for discount pricing rolled into town. Square footage was added – whether or not it was warranted – and margins declined. Conventional stores started to suffer major sales erosions as consumers flocked to discount stores and bought items only when they were on special. Christmas turkey prices in 2013, for example, were lower than they were 30 years ago. There was a time when there was a correlation between product acquisition costs and retail prices, but today’s pricing

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strategies follow a different set of criteria. Losing plenty of money on loss leaders seems to be the norm. We have experienced a major paradigm shift in our industry that will last for many years. So, is the glass half full or half empty? Let’s be optimistic and take the half-full approach. I spend a lot of time visiting stores. I see plenty of great retail execution. However, I also see plenty of lost opportunities. Here’s an actual story to illustrate my point. A few months ago, I visited two stores within a three-mile radius of my house. I read the ads for each store the night before and planned my purchases based on its features. Store A is a discount store; Store B is a conventional store. As I pulled into the busy parking lot of Store A, a massive outdoor display of 10-inch hanging flower baskets, retailing for $6.99, caught my eye. This was the hottest price in town. Customers were buying three or four at a time. Upon entering the store, I saw many customers reading the weekly flyer as they shopped. The store was running a dollar sale that week, and shoppers were loading up on the bargains. (continued next page)

January | February 2014

Open Mike

The key feature items were prominently displayed along with related items for increased sales and margins. I had planned on spending only about $10 at this store. Instead, I spent over $100, including six hanging baskets that I told my neighbours about. Nice things happen when you have the right items, at the right price, in the right quantities. I have a great first impression and lasting memory of this store. My visit to Store B yielded a far different first impression and lasting memory. About 25 hanging baskets were on display at the front entrance, priced $4 higher than those at Store A, although the quality was comparable. My first impression was that this store was highpriced and not a destination for seasonal merchandise. I headed for the store’s bakery to buy a baguette, and was alarmed to find none in the counter. It was 9:30 a.m. on a Friday morning and this department wasn’t set for business. My next stop was the meat department, where the lead feature that week was top sirloin roast. Much to my surprise, there were none in the counter and no employee around to ask about it. As I walked to the checkout

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(there was only one lane open and one customer), I noticed that the first front-end display was 12-pack canned pop at $6.29. That is prime real estate to showcase lead ad items for price image and sales. You never merchandise regular-priced items on your #1 end, especially a highly promoted category like soft drinks. My lasting memories of Store B: uncompetitive seasonal merchandising; not ready for business when the store opened; out of stock on advertised items; high prices; few customers. My point: Despite what happens in the marketplace, first impressions and lasting memories fall under your domain if you own or operate a store. You can meet today’s retail challenges head-on by delivering on the basics that enhance the consumer experience: »» Make sure your store creates great first impressions and positive lasting memories; »» Work at selling your customers more when they’re in the store; »» Have solid merchandising standards, practices and disciplines; »» Be ready for business when the store opens; »» Be competitive on seasonal items; »» Ensure your employees are engaged in their job and take pride in their work; »» Improve your in-stock position on both advertised and shelf items; »» Visit stores in your trading area so you know what your competitors are doing, and develop plans to compete with them more effectively; »» Make sure displays are well stocked and well signed, with great cross-merchandising for sales and profit enhancement; »» Improve your overall value proposition; »» Ask your customers what you are missing and how you can improve. Do something about it! It’s not all doom and gloom. Yes, the competitive pressures today are immense, but by satisfying the needs and wants of your existing customers, you can build a solid foundation for retaining them and attracting new ones.

LAUNCH PAD

As the world leader in store technology, Toshiba understands that mobility represents the most significant challenge – and the greatest opportunity – facing the modern retailer. How can you give your customers a seamless experience, whether they’re browsing on the bus or paying in the store? Can your store associates better engage via mobile tablets like our new TCxFlight™ – and, if so, is it time to rethink the design of the store itself? Find out how mobile technology can both enhance the customer experience and boost the bottom line in our new white paper, “Taking Stock: How to Secure Merchandise in a Mobile World.” Download it today at togethercommerce.com/mobility

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

January | February 2014

Toshiba, Together Commerce, TCxFlight and related logos are trademarks of Toshiba Corporation, Toshiba Global Commerce Solutions, Inc. (“TGCS”) or their affiliated companies in Japan, the United States and/or other countries, registered in many jurisdictions worldwide. Copyright © 2014 TGCS.

SHAKEUP

Your challenges our solutions

IN AISLE 8 By Sally Praskey

As behemoths like Amazon.ca and Walmart.ca extend their brand experience to online grocery sales, the centre store of traditional supermarkets may be coming under siege. But grocery e-commerce need not portend doom and gloom. Grocery Business takes a look at the implications.

WHAT IS THE POTENTIAL OF ONLINE GROCERY SHOPPING? While wide-ranging predictions abound, Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers, cites statistics showing online grocery sales TOM BARLOW doubling every year for the next five years to reach about 10 to 12 per cent. Equally bullish on the prospects, Bill Bishop, chief architect of Chicago-based consultancy Brick Meets Click, says more than one in 10 consumers in the U.S. are already buying some groceries online, according to the company’s recent study Six Degrees of Digital Connections: Growing Grocery Sales in an Omnichannel World. Bishop expects online grocery sales to grow to at least 10.7 per cent by 2023. Centre-store products will likely represent a significant percentage of that total. Others are not convinced. Conceding that online grocery shopping will indeed have a place in the marketplace, retailing veteran Michael Marinangeli, a principal at Toronto-based MIDEB Consulting Inc., believes it will represent a very small percentage of business – minor in comparison to other competitive challenges grocery retailers have faced over the last five years. “I don’t see it as a big threat,” he says. He contends grocers should focus their efforts, at least

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in the short term, “on improving their in-store offering today.” Interestingly, in U.K. supermarkets – ground zero for online grocery shopping – grocers have been less affected than is expected in North America, says Stephen Mader, director of digital retailing for Kantar Retail in the U.K. That’s because the online evolution in the United Kingdom began with supermarkets that owned both the in-store and online shopper experience, while in North America, online sales have been dominated by Amazon, a non-bricks-andmortar retailer, leaving traditional grocers to play catch-up. “There is still enormous risk of the physical centre store being disrupted by tactics like automatic replenishment of big, bulky, predictable items,” Mader says. “Pet food, paper towels, toilet paper, cleaning products, and health and beauty products are all potential movers online.” However it plays out, online shopping isn’t about to fade away as several high-profile players, who were perhaps ahead of the curve, did in the dot-com bust of the early 2000s. “I think it’s a fundamental shift in the business model and in how consumers behave,” says Jennifer Lee, partner, national digital and omnichannel leader, Deloitte.

“It’s an interesting time to be in retail. How many times in our lifetime will the consumer change this drastically?” Jennifer Lee, Deloitte

39% of adults want grocers to deliver their orders Source: Online Grocery Shopping is Going to Reach $9.4 Billion. You Should Care. – buxtonco.com

By Years G R O U P

of innovation

www.sial-group.com

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January | February 2014

R e g i s t e r

T o d a y ! Bill Bishop of Brick Meets Click believes the greatest opportunities lie in two major areas:

HOW ARE GROCERS RESPONDING?

CONNECTIONS,NEW PRODUCTS,TRENDS. M A Y

Y O U R

C A R T

RUNNETH

OV ER

Many grocers are carrying a limited quantity of high-use items for the convenience of customers, “but they can’t play the pricing game that’s going on,” says Barlow. “They’d love to because those are usually high-margin items and brand names that consumers know and want. But I think we’re seeing a shift into more of the experience within the store, which means it’s more around the fresh, the produce, the bakery, meat and deli offering.” Bricks-and-mortar retailers must add value to the shopping experience beyond price, Mader concurs, citing the Loblaws store at the former Maple Leaf Gardens in Toronto as an example of a large store adding a more experiential perimeter.

The trend to e-commerce can represent a significant opportunity for grocers, particularly independents. “If you are a small to medium-sized grocer, you have a huge competitive advantage because you’re much more nimble, and online is all about being nimble,” says Lee. “The advantage for all of these grocers is you can act like a big player when you’re a small player.”

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“We’re starting to see retailers really understand which SKUs, at which pack sizes, are needed in • Specialty products and local each of their store formats,” says products that are unique. Mader. “For an immediate/urgent need, a small local express store, like a Sobeys • Subscription models. “The subscripUrban Fresh or a tion model could be very easily Shoppers Drug Mart, would fill fulfilled by a store.” He notes that the that need – average household doesn’t buy more small pack sizes than 300 different UPC products in to hold the STEPHEN MADER Kantar Retail the course of a year, although the shopper over until their large bulk pack is average store carries between delivered.” 10,000 and 30,000 items. Barlow says that grocers will make adjustments to their centre-store offerings by carrying different sizes or varieties. “Bigger packs will potentially go through other WHAT ARE THE OPPORTUNITIES? modes of delivery.”

JENNIFER LEE Deloitte

WHAT ARE MY OPTIONS? Online doesn’t have to mean home delivery; there are many fulfillment models (see "Takin’ it to the Streets," Grocery Business, July/August 2013, page 56). “There are a large number of possibilities, and they’re all kind of white spaces for entrepreneurs,” says Bishop. He has recently introduced a service to help grocers evaluate the readiness of

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their market for online shopping, based on the demographics of the population. Grocers who choose to compete in online should treat it as part of their overall marketing plan, rather than as a separate function, says Barlow. Independents need to capitalize on what they can offer that a large company like Amazon cannot.

“I think what they can offer is a store you can go into with people you can talk to,” he notes. “The local independent retailer has built those relationships, and I think that is the advantage they’re going to have.”

January | February 2014

STRATEGIC LEADERSHIP COFFEE

One of the most popular beverages in the world, coffee has been transforming itself with the arrival of the new single serve brewing systems. Consumers are adopting the single serve technology for its convenience, quality and freshness. This evolution will be transferred to even more categories, expanding beyond coffee and bringing growth along the way. Meanwhile, â&#x20AC;&#x153;traditionalâ&#x20AC;? coffee drinkers are also evolving toward premium coffees, looking for origins, fair trade or particular bean blends. Seizing these opportunities and adapting their on-shelf merchandising will be key for retailers to seize their share of this growth.

COFFEE:

Single Serve Sales Soar

SINGLE SERVE BRINGS ADDITIONAL SALES INTO THE COFFEE CATEGORY

Coffee has the highest penetration after tap water, at 65% of the population(1)

VOLUME ($) OF THE COFFEE CATEGORY

C offee category represents sales of more than 1,200,000,000 TL Single Cup

$1,000,000 per year (Nielsen market track, 52

TL Traditional Coffee

weeks ending Nov 16th 2013, national all channels)

1,000,000,000

The growth of the category is still one of the

2013 GROWTH OF

800,000,000

highest sources of $ gains in grocery, with a

growth of 9%, driven by the single serve segment,

600,000,000

which is adding value to the category with a growth of 48%

400,000,000

T here is an opportunity in the traditional cans

200,000,000

& bags format to trade up transactions to Premium coffee, which performs better.

2011

2012

2013

(1) Source: 2013 Canadian Coffee drinking Trends, Coffee Association of Canada

Source : Nielsen Market Track, National +Drug+ Mass Merch+Gen Merch+Warehouse Club, $ sales; 52 weeks ending October 19th 2013

$ SHARE

SINGLE SERVE IS FUELLING HOT BEVERAGE GROWTH NATIONALLY +50%

Single Serve Beverages

Coffee Substitutes 0.1% Coffee Whiteners 1.8%

Regular Tea 13.2%

Coffee Filters 1.6%

30.4%

Single Serve Coffee 28%

Last year was at 20%

Single Serve Hot Cocoa 0.7%

Regular Hot Chocolate 3.0%

Single Serve Tea 1.6%

Instant Coffee 10.5%

$ GROWTH %

Traditional Premium 11.1%

Traditional Mainstream 28.3%

-1%

-5%

Regular Hot Chocolate

Regular Tea

Instant Coffee

-5%

Coffee Whiteners

-6%

Coffee Substitutes

-8%

Traditional Coffee

-11%

Coffee Filters

Source : Nielsen MarketTrack (Coffee excluding Bulk Coffee) and ACNielsen Strategic Planner (Other Categories), All Channels, latest 52 weeks ending October 19th 2013

STRATEGIC LEADERSHIP

120,000,000 100,000,000 80,000,000

What is single serve? Why do people choose single serve?

60,000,000

Quality comes first!

40,000,000

It makes a great tasting coffee T he K-Cup® packs, disc or capsules are easy to find It’s easy to keep clean It brews fresh beverages O ffers good value for the money Source: CROP - U&A, March 2012

300,000 250,000 SINGLE SERVE COFFEE SALES IN $ SINGLE SERVE BREWER UNITS

200,000 150,000

Back-to-school and Holiday season bring new consumers in the single serve systems

20,000,000

100,000 50,000

0 Units 4wk Dec. 18, 2010 4wk Jan. 15, 2011 4wk Feb. 12, 2011 4wk Mar. 12, 2011 4wk Apr. 09, 2011 4wk May 07, 2011 4wk June 04, 2011 4wk July 02, 2011 4wk July 30, 2011 4wk Aug. 27, 2011 4wk Sept. 24, 2011 4wk Oct. 22, 2011 4wk Nov. 19, 2011 4wk Dec.17, 2011 4wk Jan. 14, 2012 4wk Feb. 11, 2012 4wk Mar. 10, 2012 4wk Apr. 07, 2012 4wk May 05, 2012 4wk June 02, 2012 4wk June 30, 2012 4wk July 28, 2012 4wk Aug. 25, 2012 4wk Sept. 22, 2012 4wk Oct. 20, 2012 4wk Nov. 17, 2012 4wk Dec. 15, 2012 4wk Jan. 12, 2013 4wk Feb. 09, 2013 4wk Mar. 09, 2013 4wk Apr. 06, 2013 4wk May 04, 2013

Single Serve Revolution

BREWERS SALES HAVE A DIRECT INFLUENCE ON SINGLE SERVE BEVERAGES

Many consumers buy their brewers outside of grocery, but the advantage this channel has is frequency of visits. Grocery stores should ensure that they capture the attention of these potential new customers by having an attractive single serve section (product offers, signage and displays). Source: Nielsen Market Track, National +Drug+ Mass Merch, $ sales; Brewers: NPD, Unit sales, National, NPD estimated to represent 74% of the retail market.

SINGLE SERVE SYSTEMS’ IMPORTANCE IS REFLECTED IN THE COFFEE CATEGORY The importance of single serve systems is reflected in the coffee category one year later

16%

25%

40% 30%

47% 42% Share(unit) of single serve brewing systems

75% 84%

60% 70%

2011

2012

Single Serve Brewing Systems

Auto-Drip/Espresso Coffee Makers

53% 58%

Share($) of single serve coffee

2013 Single Serve Coffee

Traditional Coffee

Single serve’s importance will continue to increase in the next year, and single serve offer will expand to other categories. Particular attention should be given to this category to make sure it’s allocated the APPROPRIATE SPACE, considering the growth and the profitability. Source: Brewers: NPD National All Channels , 52 weeks ending October 2013, estimated to represent 74% of the total market; Coffee : Nielsen Market Track, National GB+DR+MM+GM+WC, 52 weeks ending October 19th 2013.

CAPTURE MORE HOUSEHOLD MEMBER USAGE

By expanding the offer and highlighting new products, grocery stores can capture incremental sales. EXAMPLE: A household could regularly buy coffee and add tea for the mom, hot chocolate or iced tea for the kids, decaf or different coffee blends for the guests when entertaining at home.

OPPORTUNITY TO INCREASE OCCASIONS Share of daily consumption by beverages

Coffee 16%

Increased Consumption = Increased Sales

Milk 12%

Tea 11% Alcoholic Beverages 6% Hot Chocolate 2%

Energy Drink 1% Sport Drink 1%

Once consumers have a single serve brewer on their counter, the goal is to INCREASE their consumption per brewer. To achieve this goal, single serve is expanding the offer outside coffee to: 1 Capture more household member usage, 2 Provide opportunity to increase occasions and 3 Increase consumption throughout dayparts.

Already covered

Other 1%

Iced Tea/Coffee 5%

Pop 10%

Hot Cappuccino/Latte 2% Juice 11%

Water 22%

Source: 2013 Tea Time survey (TAC), Nielsen, weekdays, 7843 respondents in Canada

INCREASE CONSUMPTION THROUGHOUT DAYPARTS

FIRST THING IN THE MORNING WITH BREAKFAST

Caffeinated Coffee Decaffeinated Coffee

Espresso

LATE MORNING

Flavoured Coffee

Tea

WITH LUNCH AFTERNOON WITH DINNER

EVENING

Flavoured Coffee Flavoured Coffee

Iced Beverage

Decaffeinated Coffee

Tea

Hot Cocoa

Multiple sources of growth in single serve

COFFEE MERCHANDISING TIPS

THERE ARE 3 MAIN SOURCES OF GROWTH IN THE SINGLE SERVE SEGMENT:

NEW BUYERS: They are consumers who were not consuming coffee last year. They can be new coffee drinkers who enter the category buying single serve, not going through traditional coffee first. They can also be consumers who were buying away-from-home.

25% 50%

OF COFFEE DRINKERS REPORT DRINKING MORE OFTEN AT HOME OF THEM HAVE REDUCED THEIR “TAKE-OUT” PURCHASES (1)

(1) NPD Group/Consumer Tracking Service, National all channel, 52 weeks ending June 2013

INCREASED CONSUMPTION: Single serve coffee allows consumers the convenience of having a perfect cup of coffee rapidly, while also keeping coffee fresh, since it is individually packaged. This benefit encourages consumers to carry more types to fulfill the different tastes of family members or to offer to visitors (i.e. : Decaf, flavoured, different roast). It diminishes the risk of throwing out non-used products.

TRANSFER FROM ANOTHER TYPE OF COFFEE: There is a part of the single serve growth that is coming from traditional or instant coffee users switching to this new technology, proving that consumers are willing to pay a higher price for the product benefits. These transferred sales pay off for retailers, as single serve products generally bring higher margins.

• Allocate proper space to the Hot Beverages categories, which are one of the fastest growing categories in the centre store. • Dedicate a section to single serve products; should now be considered on its own. (The gold-standard section is 16 feet long) • Single Serve section should be located between coffee and other hot beverages, as many hot beverages are offered in single serve format. • Conventional banners should still have a Premium/Specialty coffee section to differentiate (Bulk coffee, espresso, whole beans, regional, etc.).

MERCHANDISING IN SINGLE SERVE SECTION Products on shelf should be regrouped by: •B rewing system like Keurig® and TASSIMO (Every single serve brewing system has its own format of container. They are not compatible with each other.) •T ype of beverages (highlight outside coffee categories to increase awareness and impulse sales) •B rand •P rice Tier (allow consumer to understand the offer in the category)

STRATEGIC LEADERSHIP

MERGER

MASH-UP MASH-UP IF 2013 WAS THE YEAR OF THE ACQUISITION, 2014 IS THE YEAR OF THE MERGER

For Loblaw and Sobeys, acquiring their new businesses (Shoppers Drug Mart and Canada Safeway, respectively) required nerves of steel, deep pockets and no small amount of gamesmanship. Those efforts, however, will pale in comparison to the actual integration of these companies.

grocerybusiness.ca

Perry Caicco, managing director for CIBC World Markets, analyzes the effects of the mergers on the industry in 2014. Grocery Business: Perry, how do you think these mergers will play out? Perry Caicco: In every merger in every industry, the acquiring company characterizes the acquired company as a “strong strategic fit” with a “great culture” and “excellent management.” Then, as often as not, the integration becomes problematic. The new company proves difficult to integrate and seems culturally incompatible. Key management is pitched out, and write-downs are taken. We do not expect that to be the case in the Loblaw January | February 2014

data analytics millennial shop getting smaller locally grow THE ISSUE THEFUTURE FUTURE ISSUE

CONTINUED FROM PG. 19

and Sobeys situations, but stakeholders should be aware that neither merger is likely to go exactly as planned. GB: And what about the multiples? PC: The hefty multiples paid for these assets (11.6x EBITDA for Shoppers and 11.3x EBITDA for Safeway) mean that the cost-saving (“synergy”) targets of $300 million and $200 million, respectively, must be achieved to make the deals pay out financially. In the world of synergies, there are easy synergies, such as jacking bigger rebates out of suppliers, the difficult synergies of downsizing offices and distribution assets, and the ephemeral synergies of boosting sales at the acquired company, cross-pollinating ideas, etc. In order to realize some of the easy synergies and all of the difficult ones, systems integration is a necessity. The acquiring companies each

have long and sometimes checkered histories with their own IT developments, so it would not be unreasonable to predict that seamlessly and quickly blending the operating systems of the new companies into the old ones will not happen without some unforeseen complications or some unpredicted delays. Head offices can have wildly different structures (often due to the embedded IT situation), and logistics can be wholly incompatible. Decisions have to be made around private-label products, store banners, loyalty programs, compensation systems, management layers, talent retention, and stakeholder communication. As well, stores will have to be divested, opening another tremendous opportunity for Canada’s famous independent grocers (Asian and non-Asian) to grab some cheap and easy market share.

GB: So, what can the industry expect in 2014? PC: In light of all this, 2014 could be a year of frustration and confusion for many grocery industry participants. The two largest Canadian grocery distributors will have their hands full dealing with this integration.

data analytics social networking entertainment locally grown 20

January | February 2014

Social media’s power to influence what people buy is widely recognized, and in 2014 it will also influence what retailers sell. For example, message-board-style website Pinterest stands to be the dominant social-commerce platform, according to the newsletter Social Media Insights. A highly visual site, Pinterest attracts mainly women users who keenly share their posted images with their networks.

There will be no shortage of minutiae and meetings and memos and policies and consultants and cut-overs and black Fridays and unintended consequences. And all the while, the businesses need to maintain their competitive positions in the marketplace.

TRENDS WITH TRACTION With online shopping already becoming mainstream, the Grocery Business team has identified 10 additional retail megatrends that will impact your business in 2014 and beyond.

2 SOCIAL MEDIA WILL DISRUPT CONSUMER BUYING PATTERNS

Although each acquisition comes with some sort of long-term vision, often invoking themes such as health and wellness, freshness and convenience, and a dream of national dominance or footprint, those visions will take years, not months, to be achieved. As always, the key will be, not in the strategy, but in the day-to-day execution.

1 RETAIL AS ENTERTAINMENT: THE IN-STORE EXPERIENCE BECOMES THEATRE The lines between entertainment and shopping continue to blur. To make the in-store experience more engaging, and to combat the threat of online shopping, grocers are experimenting with a variety of strategies: products offered in-store only, events and promotions.

For example, Loblaws at Maple Leaf Gardens and Sobeys extra store attract customers who are willing to spend more on a great food experience. The challenge for grocers will be to roll out that level of excitement to their broader store base in a cost-effective way.

AS PINTEREST USERS MOVED FROM BROWSING TO PURCHASING, RETAIL SALES ON CYBER MONDAY, 2013, GREW BY

260%

3 OMNI-CHANNEL WILL REQUIRE A SINGLE CUSTOMER VIEW TO PROVIDE A SEAMLESS SHOPPING EXPERIENCE Retailers understand that shoppers often interact with their banners through multiple channels, but what actually happens along this journey can be a mystery. On any given day, a shopper could experience the brand on a variety of devices and across multiple platforms. For example, the successful launch of Longo’s, Loblaw’s, and Sobeys’ mobile shopping apps signaled that customers are primed to take advantage of coupons and recipes designed just for them while shopping in-store. In 2014, a priority for retailers will be to connect the dots between the various channels in order to personalize and enhance the shopping experience.

4 STORES AS LIVING WEBSITES Staples recently launched two “omni-channel” smaller-footprint stores with an edited but well curated product selection, supplemented by in-store kiosks where customers can order product with free next-day delivery. The strategy is to turn the stores into a 3-D version of the retailer’s website.

grocerybusiness.ca

5 DATA ANALYTICS WILL ALLOW RETAILERS TO IMPLEMENT DYNAMIC PRICING AND LOCATION TARGETING (GEO-FENCING) TO TAKE ONLINE PERSONALIZATION IN-STORE Through the opportunities provided by big data and location-based technologies, grocers can tailor and personalize their consumer offers. This dynamic pricing will help alleviate the downward pressure on margins by allowing retailers to make strategic adjustments in order to maximize ROI per customer. For example, driven by real-time data analysis, Amazon is able to change prices 2.5 times each day.

January | February 2014

THE ISSUE THEFUTURE FUTURE ISSUE

6 BIG BOXES WILL CONTINUE TO GET SMALLER

data analytics millennial shoppers etting smaller locally grown

A TASTE OF

As the population ages and consumers look for a more personalized retail experience, smaller store formats are on the rise. Even the largest bricks-and-mortar retailers realize that their stores can’t compete with the enormous inventory Amazon has access to.

THINGS TO COME

Walmart’s Neighborhood Markets, Sobeys’ IGA Express, and Target’s CityTargets are reflections of this trend. And as people move into urban centres, a “Main Street” type of retail experience will become even more prevalent.

The McCormick 2014 Flavour Forecast identifies five culinary trends that are heating up worldwide

7 CONSUMERS ARE INCREASINGLY AWARE OF FOOD WASTE

8 LOCALLY SOURCED HAS SIZZLE

Buying local ties into consumers’ desire for unique products offered in a stimulating retail environment with a neighbourhood feel. To tap into the consumer’s appetite for a local food experience, Whole Foods Market is substantially increasing the amount of low-interest loans it is making available to more than 100 growers, producers, and food artisans.

Root-to-leaf cooking, repurposing leftovers, and composting food scraps at home are becoming a way of life for an increasing number of consumers, and they will expect grocers to follow similar sustainable practices. Food Waste Awareness Weeks, initiated in the U.K., are spreading around the globe.

MILLENNIAL SHOPPERS WILL EXERT GREATER INFLUENCE ON THE MARKETPLACE As the Millennial cohort enters parenthood, they will demand that the products they buy for their children reflect their ideals of transparency and social consciousness. Products that are clearly labelled, ethically sourced and organic will move to the top of their shopping list.

10 GROCERY STORES ARE THE NEW KITCHENS AND RESTAURANTS Shopping trips are taking place on a more frequent, as-needed basis, supplanting the traditional weekly or monthly stock-up. Consequently, the grocery store is becoming a substitute kitchen (and often a preferred choice over quick-serve restaurants), where consumers are increasingly inclined to purchase a ready-to-eat dinner to take home. Sources: JWT, The Hartman Group, Australia Business Review, Advertising Age, Daymon Worldwide

January | February 2014

IN HER OWN WORDS CARLA COOPER, CEO, DAYMON WORLDWIDE

“

Retailers across the globe are facing a more fascinating, challenging business landscape than ever before. We understand that decision-makers in our industry are dealing with contradictions that are hard to reconcile. These include: •T rying to successfully serve the different needs and preferences of both the large aging population and the tech-enabled Millennial group; •M anaging physical stores while tending to the explosive growth of non-store based retail; •M eeting consumer needs for convenience in products, services and formats that allow them to quickly get what they need while also enjoying the customized retail experiences they've come to expect and will demand. Each of these challenging realities will have tremendous impact on the retail landscape in 2014.

”

McCormick & Company, Inc., left no stone unturned – or taste trend unexplored – in researching its 2014 Flavour Forecast. “The Flavour Forecast is a global annual report . . . that identifies emerging culinary trends and techniques that will find their way to Canadian tables, and inspire creative and delicious innovation,” says Dina Clark, vicepresident, marketing, McCormick. To develop the report, McCormick consulted researchers, trend trackers, marketing experts, chefs, culinary experts, food technologists, and sensory scientists around the world, says Clark, “who serve as a catalyst for driving flavour innovation throughout the food industry.”

SPICING UP SALES IN-STORE • Place feature recipes on stands beside the spice rack and next to the ingredients. • Inspire creativity by positioning complementary ingredients that may not be apparent to mainstream consumers. • Conduct cooking demonstrations and consumer tasting events to highlight this year’s flavour trends.

FL AVOURS IN FAVOUR

FLAVOUR ON FIRE: CHILES ARE HOT

Beyond discovering new varieties, the obsession with chiles has extended into using techniques like grilling, smoking, pickling, fermenting, and candying to tease out their flavour potential. Chiles to watch: Guajillo, mild Mexican dried chile; Chile de Arbol, bold Mexican chile; Tien Tsin, hot Sichuan chile; Aji Amarillo, hot Peruvian yellow chile.

grocerybusiness.ca

MODERN MASALA: INDIAN CUISINE CURRIES FAVOUR

COMPACT COOKING: BIG FLAVOUR FROM SMALL SPACES

Already familiar with basic curries, consumers are exploring more flavours in new contexts, from food trucks to fine dining. Flavours of the future: Kashmiri Masala Northern Indian spice blend, Paneer cheese, Jalfrezi stir-fry-style

As the movement to more efficient, compact kitchens grows, urban dwellers are discovering creative, cross-functional ways to prepare tasty meals making the most of what’s available. Must-have ingredients: tea, noodles, cilantro/coriander.

curry dish.

MEXICAN FARE: BRIGHT AND BOLD From a growing taste for regional Mexican fare in North America, cultures around the world are embracing authentic elements of the bright, bold, and casual cuisine. Flavours to explore: chamoy (condiment), recados (spice pastes), tomatillos.

TASTE OF BRAZIL: WELCOMING THE WORLD Rio de Janeiro will host the 2014 World Cup and 2016 Olympics, illuminating the flavours of a dynamic melting-pot culture that includes European, African, Asian, and native Amazonian influences. Brazilian tastes are poised to emerge as a powerful influence. Ingredients on the rise: cassava flour, black-eyed peas, guava, Tempero Baiano seasoning blend.

January | February 2014

What Millennials Want

Health Trends

The Future of Retail – Part 2 Grocery Business magazine and TEN81 Lifestyle Inc. invited a group of Millennial consumers, as well as some of the industry’s leading retail and consumer packaged goods executives, to discuss shopping attitudes and preferences. Learn how this health-conscious, information-hungry and community-minded generation is impacting the future of grocery retail.

Technology & New Media How does technology factor into your grocery shopping decisions? James: I wouldn’t necessarily shop online for groceries. I like to go and see the product, feel the packaging. But if it was something unique that you can’t get in too many places, then, yes, I would buy it online. Michelle: If it’s something like toilet paper that I can have shipped, that’s fine. But I’m not swayed to shop online for groceries. I’m very at-shelf. If I was in store and I had a GPS location pop up, I might be annoyed. But if it was targeted to me based on what I’ve purchased in the past, that would be okay. Jesse Jones: If you look at the advancements in technology and digital, and the multiple ways that Millennials engage on any given day, it means you have to look at this demographic a lot differently than you would the previous generation.

Is social media having an impact on your purchases?

MODERATOR Jana Masiewich, Director, lifestyle marketing, TEN81 Lifestyle Inc.

James: Definitely social media, blogs… I don’t ever look at flyers. Word of mouth is big. I will try something new at [a friend’s] house, then go home and make it for myself.

INSIGHT

How important is the concept of health in your food choices? Cheryl Smith: Millennials are asking for access to information, right at their fingertips. They’re information hungry and they’re using their smartphones to shop. Millennials are going to find the information they want, one way or another. If not from your brand, then from another brand.

Michelle: I try to eat healthy. At lunchtime, I will buy food from a naturopathic clinic near me instead of going to a fast-food chain. I still indulge, but I’m pretty aware of the ingredients on labels. Peter Neal: Do you shop the health section at a Loblaws or Metro? Michelle: Yes, but it’s probably my last stop in the store. I may swap some items out, but usually if the price of what I already have in my cart is lower, I will stay with that item. Paul Del Duca: I believe in having the ethnic and health sections integrated as part of the offer because it gives shoppers more choice up and down the aisles, as opposed to having to go to separate sections.

Ready-to-eat

Do you purchase gluten-free products? Kate: Yes, but not exclusively. I’m trying to cut back on gluten with all of my meals because of the research about gluten not being good for your body.

Paul Del Duca: Grocers are going down the path of offering prepared meals. Are you interested in ready-to-eat meals?

James: I’ve never had a problem with gluten and I haven’t switched over to gluten-free foods. Michelle: I feel that I’m influenced by the people I work with and some of my friends. Many of my friends have dietary restrictions, whether it’s dairy-free, gluten-free or vegetarian.

Kate: Yes, but I want to know what's in it and how it was prepared. I want to make sure it's healthy. James: I will occasionally buy a whole chicken at the prepared food counter. I would definitely be more inclined to buy a fresh sandwich [at a grocery store] if it was put together for me right on the spot, like they do at a sandwich shop.

Convenience & Information How could grocery retailers create a better shopping experience for you? Michelle: I have every intention of planning my meals, but sometimes I feel very overwhelmed when I’m in a store. If there was an app on my phone or something in the store to help guide me to ingredients... that would make me more efficient and probably save me more money. Kate: Access to information, knowing where my food is coming from, and more information about the products. If stores had a little section that showed how to use kale, and displayed everything you need to make a meal, including recipe cards… that would be interesting.

INSIGHT

Michelle: Social media in the sense that I look at recommendations… I can be swayed by a recipe online. I like to see people’s food pictures. I look at flyers.

THE MILLENNIALS

THE MARKETERS Paul Del Duca Former general manager, Ontario Sobeys Canada

January | February 2014

Jesse Jones President & chief innovation officer TEN81 Lifestyle Inc.

Peter Neal Co-owner Neal Brothers Foods

Cheryl Smith Executive vice-president, sales & merchandising Parmalat Canada

Lisa Zdunich Director business development Tree of Life

Michelle Thansingh Age: 26 Profession: Marketer Residence: Downtown Toronto

grocerybusiness.ca

James Savage Age: 24 Profession: Financial Services Residence: Downtown Toronto

Kate Robichaud Age: 32 Profession: Real Estate Agent Residence: Burlington, Ont.

Lisa Zdunich: The need for convenience came through loud and clear. Simplify, make things easier, better represent different areas of the store, help people to understand where their products are coming from, help them to plan their dinners.

Visit grocerybusiness.ca to read Part 1 of our Millennials Forum (published in the November/ December 2013 issue), and to watch a series of videos, created by TEN81 Lifestyle, recapping the key insights from the event.

January | February 2014

Catch Them While You Can Millennials are busy, well-educated foodies who enjoy exciting culinary experiences at home and on-the-go. Ipsos research shows the time is ripe for retailers and brands to connect with them in authentic ways. By Catherine Yuile

Millennials have more choices available to them than any previous generation had, and they enjoy experimenting with new brands and appreciate receiving personalized offers. Because of technology, they are an informed and connected consumer, yet Millennials are increasingly feeling overwhelmed by this abundance of choice.

Our research shows that Millennials are foodies and are open to being connected with in an authentic way; one that can help them navigate their preferences in and out of the store. Success strategies include: • Offering new product and shopping options that are relevant to their individual needs;

Two new syndicated Ipsos studies, FIVE and Conversations with… Millennials, reveal interesting insights into Millennials’ attitudes, beliefs and eating habits that offer key opportunities for retailers and brands to connect more deeply with this growing and important cohort.

• Appealing to their desire to seek out exciting culinary experiences, which are personalized to them and backed by a strong human connection.

Millennials

Gen X

Boomers

133 133 89 56

Sourced at restaurants & consumed at home

125 100 125 75

Consumed at restaurants

159 100 110 143

INDEX

182 62

Dinner

277

Evening/Late Night Snack

purchasing.

Specifically, they like to look up product

consumer reviews. Source: Ipsos UU Conversations with… Millennials, December 2013

Food & Beverages are…

Afternoon Snack

products before

MILLENNIALS ARE LESS LIKELY TO PANTRY LOAD, PREFERRING TO BUY FOOD FOR SPECIFIC MEALS OR BECAUSE THEY WANT TO TRY NEW THINGS.

Breakfast 50 Lunch

who like to research

>120 Above Index, <80 Under Index Source: Ipsos FIVE Syndicated Study 2013

87 Usually on hand

107 Purchased specifically for this meal

132 Purchased for another meal or reason

MILLENNIALS ARE MORE LIKELY TO BE PROACTIVE RECIPE USERS, SEARCHING FOR NEW RECIPES EVEN IF THEY HAVE NOTHING SPECIFIC IN MIND TO PREPARE (41% VERSUS 31% OVERALL).

Their main motivations for recipe usage are to: 1 26

Expand their food repertoire

January | February 2014

Create unique dishes they have adapted from recipes

Source: Ipsos FIVE Syndicated Study 2013

How generational differences impact grocery shopping The wide variety of ages, life stages, and unique generational viewpoints in the marketplace is unprecedented. Four Generations in the Aisle, a report on U.S. consumers by Acosta Mosaic Group, concludes that engaging the various generations effectively, while not alienating other generations, will require retailers and manufacturers to have highly tailored messages that appeal to each target generation’s distinctive values and preferences.

SHOPPERS BY GENERATION

AVERAGE # OF SHOPPING TRIPS

TRIP TYPE

SHOPPING STYLE

CHANNEL PREFERENCE

HIGH INDEXING CATEGORIES

Millennials (Born 1982-early 2000s)

4.1

34% make stock-up shopping trips; 33% make fill-in trips

Heavily influenced by friends and social/community; not brand loyal; shop the store perimeter.

Club and drug stores

Diapers, baby needs, toys, sporting goods, shaving needs, dry prep foods

Generation X (Born 1965-1981)

3.9

44% make stock-up trips; 42% make fill-in trips

Knowledgeable shoppers who use information to help guide decisions. They want to make the best possible choice.

Grocery and dollar stores

Diapers, baby food, baby needs, breakfast foods, dry prep foods, frozen appetizers

Baby Boomers (Born 1946-1964)

3.6

41% make fill-in trips; 36% make stock-up trips

Brand loyal; respond to products/ retailers that address the question “What’s in it for me?”

Grocery and club stores

Tobacco & accessories, ice, beer, charcoal logs, tea, pet care, pet food

Silents (Born 1925-1945)

3.6

37% make fill-in trips; 36% make last-minute trips

Brand loyalists who buy what they've bought before.

Drug and dollar stores

Books & magazines, floral & gardening, vitamins, wine, nuts, medication, remedies and health aids

Seniors

Food-to-Go consumed at home

Morning Snack

educated consumers

Four Generations in the Aisle

prices and read

HOW ARE MILLENNIALS INDEXING?

MEALS EATEN IN RESTAURANTS

themselves on being

information, compare

THOUGH MILLENNIALS DO PREPARE AND CONSUME MOST OF THEIR MEALS AT HOME, THEY OVER-INDEX ON RESTAURANT MEALS (DINNER/LUNCH), WHILE ALSO BUYING TAKE-OUT FOOD TO EAT AT HOME OR ON-THE-GO.

Millennials pride

200 Wanted to try something new

Average Monthly Grocery Spend (US$)

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

grocerybusiness.ca

$252.60

$323.10

$295.50

$263.70

Millennials

Generation X

Baby Boomers

Silents

Poulin discussed this strategy – and much more – when he met with Grocery Business at the grand opening of the Burlington store. Grocery Business: Why did Sobeys launch the extra concept? Marc Poulin: From Sobeys’ perspective, it’s about executing different concepts tailored to the different needs of Canadians who we believe want to enjoy great food every day. For instance, IGA Express and IGA Mini concepts represent our efforts at redefining the convenience food sector so we can bring a fresher food experience to Canadians. In the same way, we believe that Freshco is a better proposition in food discount. We want to bring solutions to consumers, and that requires our presence at every phase. And you’ll see in this extra store that we’ve put a lot of emphasis on time savers. For instance, a lot of meat has been prepared so you just need to put it in the oven. There’s also been a lot of work done on the employee side so they are better trained and have better food knowledge, with an emphasis on how to share that knowledge with our customers. I hope this will show that Sobeys has a great passion for food and we want to share that passion with Canadians.

extraspecial By Marjo Johne

GB: How is the healthy food strategy playing out? MP: Our connection with Jamie Oliver is one example. We already had Jamie Oliver products in our stores, and when his people listened to our vision, they all got excited because they said that’s very much the same commitment to good food that their team has. GB: Sobeys recently purchased Safeway; will you retain the banner? MP: We haven’t made a decision on that. We need to study consumer perception, and after we’ve done that, we’ll make the right decision.

The grand opening of the Sobeys extra store in the upscale community of Burlington, Ont., last November marked a milestone for Marc Poulin, president and CEO of Sobeys Inc. and its parent company Empire Company Limited.

GB: What Safeway synergies do you see for consumers? Safeway is very strong in pharmacy, and we’re going to learn from that. We’ll bring opportunities – like in this extra store, which has a well-being centre – into other stores. P H O T O G R A P H Y: M AT T H E W P L E X M A N

With the launch of the extra format, Poulin, a 30-year

convenience and premium/specialty formats – leaving the

veteran of the food retailing, packaged goods, and

middle ground in no man’s land – Sobeys is pulling out all

financial services industries – and a chess master to boot

the stops to provide an exciting and entertaining shopping

– is making a strategic move into the fast-growing realm

experience, and betting that its well-heeled customers are

of elite grocery offerings. As the hyper-competitive grocery

willing to pay more.

MP: We will eventually expand Needs in Atlantic Canada, and with the acquisition of 250 Shell Canada gas stations in Atlantic Canada and Quebec two years ago, we dramatically increased our convenience food business. One big advantage of a company like ours is we can test one part of the country and, once issues are resolved, we can bring the concept to other parts of the country.

retail landscape continues to polarize into discount,

January | February 2014

GB: We’ve seen a lot of Sobeys activity in the convenience sector recently; can you elaborate?

grocerybusiness.ca

AND NOW FOR SOMETHING EXTRA When Sobeys opened the doors to its Burlington, Ont., store after months of extensive renovations, it also introduced a concept that advances the company’s mission to deliver better food and meal solutions to Canadians. Designated as a Sobeys extra store, the 58,000-sq.-ft. location features additional services, departments and products to help customers make better, healthier food choices. These include: •E xtra experts such as an in-store chef, a well-being counsellor, and a cheese ambassador; • A special events centre to host classes and other events focusing on better food and healthy eating; • Expanded product selections in key departments such as bakery – which now carries more artisanal breads – ready-to-eat or heat, produce, meat and seafood, cheese and deli; • Extra savings on essential items such as milk and eggs, as well as monthly price checks on more than 3,000 products.

January | February 2014

GB: As consumer adoption of online shopping grows, how do you think bricks-and-mortar retailers can win in this changing landscape?

TYPE

MODULAR

TYPE

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.

Applesque design counter scale with the cutting edge Bizerba K scale App designed to inform your operator so the customer feels like they are talking to a foodie or a chef. Not to mention industry leading application integration and power savings backed by Bizerba workmanship.

K-FLEX

MP: There’s a lot of talk about Amazon but we’ve been in the online business for a long time. Twenty years ago, we launched iga.net. Working on that front, we realized that food shopping is not a single-channel experience. The grocery store, convenience store, and online store are all part of the experience.

GB: What do you feel is the largest challenge that the industry is facing?

GB: What advice would you give to young people considering grocery retailing as a career?

MP: The industry currently has to think about how we will bring value back to Canadians. A big part of it is, yes, cost control and delivering great prices to Canadians.

MP: People often neglect grocery retailing as a career path. They don’t see the breadth of opportunities we offer, and that the food industry is multi-dimensional. It’s also very rewarding, especially from an emotional perspective. There's no industry that interacts with the customer three times a day like we do.

KH 100

VITALSTATISTICS Born: Quebec City, August 26, 1961 EDUCATION Bachelor of actuarial science from Laval University (1982)

Retail Portfolio: High performance with a wide range of different models and equipment variants.

A TRADITION OF INNOVATION. Bizerba has been focused on weighing technology since 1866. We provide state-ofthe-art PC Based Scale Hardware and Software solutions for full-service and pre-pack departments with a primary focus on increasing your sales and profits. Closer to your business, flexible for your needs, ready for the challenges of a global economy. www.bizerba.com

1998: Poulin became president of operations at Sobeys Quebec in 2001 and, in 2011, president of the IGA operations business unit.

2012: President and CEO of Master of management (marketing) Sobeys Inc. from the J.L. Kellogg Graduate School December, 2013: Expanded his of Management at Northwestern role to president and CEO of parent University in Chicago (1985) Empire Co. Ltd. MANAGEMENT ROLES PERSONAL TIME 1985-1986: Marketing – Serves on the board of directors Unilever Canada of Montreal Heart Institute 1986-1993: Senior marketing and Foundation; past president of the merchandising roles at Provigo Inc. Quebec Chess Federation; and member of the Montreal Board of 1994-1995: General manager role Trade. at Culinar Inc.

According to Marc I was supposed to be an actuary but ended up also doing an MBA in marketing at (Northwestern University’s) Kellogg School of Management. It’s a funny thing, but Eric La Flèche (CEO of Metro Inc.) and Pierre Karl Peladeau (CEO of Quebecor) were in the same class. Marcel Côté hired me when I was a student to work in his consulting firm. He made me realize my true calling in life was in

1995: Vice-president of corporate marketing at Desjardins-Laurentian Life Group

In 2010, Poulin was recognized by Perform Quebec as one of Quebec’s top business leaders.

business rather than as an actuary. By a strange twist of fate, later

1997: Oshawa Group, vice-president of grocery merchandising. The Oshawa Group was acquired by Sobeys Inc.

Poulin and his wife Ginette Côté have two children in university.

was bought by Sobeys (through Empire). Marcel was on the Sobeys

grocerybusiness.ca

in my career, I ended up joining the Oshawa Group, and Oshawa board. Over the years, he guided me and introduced me to people. January | February 2014

Shelf Life

Fresh Perspective

REELING IN

Seafood Sales

Fresh fish continues to capture consumer interest, as the latest Nielsen numbers indicate. To increase turns and reduce shrink, consider these display suggestions from Chuck Anderson, Sousa Seafood, Boston:

As the healthy eating trend continues to impact every aspect of Canadians’ diets, the demand for fresh and value-added seafood is growing at a historic pace. Convenience and health are an unbeatable combination, creating a unique opportunity but also some challenges for retailers looking for ways to maximize sales of both fresh and frozen products. We turned to our panel of experts for ideas on how to hook the consumer on your seafood products.

TOP GROWTH DRIVERS – FRESH SEAFOOD

$ Sales

% $ Share

$ Vol % Chg

SHRIMP

34,680,271

5.5

2,355,489

0.4

STEELHEAD

9,532,838

1.5

TUNA

5,887,291

0.9

• Place fish of contrasting colours and textures next to each other.

COD

21,860,284

3.5

LOBSTER

98,964,280

15.7

OYSTERS

7,083,562

1.1

SCALLOPS

19,359,990

3.1

SALMON

247,170,271

39.2

HALIBUT

13,432,164

2.1

• Rather than displaying your entire product in the morning, put out smaller quantities and continually refresh as the day goes on.

* 52 weeks to November 16, 2013

— Jeff Duffin, vice president, marketing, Clearwater Seafoods

Finding Value in Frozen

• Display the front of the package in the bunkers, so consumers can see a clear visual of the product.

According to Louis Baus, of Alaskan Water Seafood, consumers are choosing frozen value-added products because of…

• Create P.O.P. with impact. Colourful signage with high-quality food photography tells a sales story.

Safety:

Economy:

Variety:

When seafood is frozen and stored at appropriately low temperatures (at least -10° F), bacterial growth is arrested, preserving the product and dramatically extending shelf life.

High-quality frozen fish is easier to inventory and less expensive than fresh.

There is a wide range of frozen seafood, including value-added forms like breaded/ battered and complete dinners.

January | February 2014

$ Vol Chg

MACKERAL

• Consider what your customer is seeing when looking at the display case. Is it the red meat of the salmon or the skin edge?

Frozen Seafood on Display

— Joe Castaldi, senior partner, Brand Marketing & Communications Group

10%

ampling is absolutely key to initiating sales in the » S category. These programs boost sales and create an overall lift. In-store demos are great, as they give customers the opportunity to trial the product prior to purchase, while also allowing the retailer to demonstrate ease of use and preparation.

ross-merchandising with complementary items like » C pasta or salads helps to promote value-added seafood as a meal component, while providing home chefs with the ability to add their personal touch.

• Drive impulse purchases and increased consumption with onshelf ad pad programs that have recipes and coupons.

$629.8 M

• Use high and low display shelves to create visual interest.

What’s hot in frozen value-added seafood? » “ Speed scratch” items are a hot option in frozen seafood. These pre-marinated, cooked or seasoned products are very popular with consumers, giving them the head start they’re looking for in the kitchen, while still allowing them to customize their meals and make them their own.

Fresh Seafood Total Sales*

Make room on your shelves. Thousands of hot new trends are coming to New York City. Discover the craft, care and joy behind 180,000 specialty foods and beverages. Meet 2,500 exhibitors from all over the world.

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Online registration opens January 27, 2014

fancyfoodshows.com

GSW 2014 THE INDUSTY’S GREATEST WESTERN GROCERY SUMMIT

Grocery Showcase West is widely regarded as THE epicenter for growth and development in the Western Canadian grocery industry.

APRIL 6 & 7, 2014 VANCOUVER CONVENTION CENTRE

GS W

GROCERY SHOWCASE WEST

YEARS OF INNOVATION

W e m a k e e v e r y d a y l i f e b e t t e r, e v e r y d a y .

More than Bleach

t’s one of the world’s most iconic and enduring consumer-packaged-goods companies. Recently marking 100 years since it was

launched by five partners with only $500 in seed capital, Clorox remains as familiar as ever

“I worked in Canada, and most of our management team there are

to consumers in North America and around the

Canadians. One thing we understand very clearly is that it’s not the

world. But the company that was forged in 1913 with its unmistakable diamond trademark has also evolved and expanded well beyond its seminal product. Today, Clorox is more than bleach; it’s a vast family of products that make

51st state. We are very respectful of the uniqueness of Canada in terms of its customs, consumers and regulatory environment.” - Don Knauss, Chairman and CEO, The Clorox Company

“everyday life better, every day.” “Clorox used to be a single-brand, single-product company,” says Don Knauss, Chairman and CEO of The Clorox Company, headquartered in Oakland, Calif. While most consumers recognize the name, many don’t know that Clorox is more than bleach. How much more? Try 64 brands. In addition to its bleach products, The Clorox Company’s portfolio includes 24 U.S. brands and 40 international ones. The business has grown over the century into a $5.6-billion operation with about 8,400 employees worldwide, 39 manufacturing plants, and markets in more than 100 countries. What’s perhaps most surprising is the

innovation into their categories. The company’s strategy is simple: build big-share brands in mid-sized categories. “Today, 90 per cent of our product portfolio is made up of either No. 1 or No. 2 brands.” Just as it made Clorox into the world-leading name for bleach, The Clorox Company today continues to focus on building the brands in its portfolio. “The best thing we can give retailers is a brand that sells,” says Knauss. “And this company is very good at building brands.” Last fall, the company revealed its 2020 Strategy for

diversity of the Clorox product portfolio. From

long-term profitable growth through

Green Works to Glad, Hidden Valley to Kingsford,

greater employee engagement, enhanced

Burt’s Bees to Brita, Clorox products cover

consumer marketing, continued focus on

practically every part of the home. In addition,

R&D, expansion into new categories, channels

with its line of professional and commercial

and countries, and further waste reductions

cleaning products, Clorox has extended its

in the company’s operations, products and

presence in the community – into schools,

supply chain. “You will see an even more agile

hospitals, and food-service establishments.

enterprise focused on making sure all the

Today, says Knauss, all Clorox products boast

The business has grown over the century into a $5.6-billion operation with about 8,400 employees worldwide, 39 manufacturing plants, and markets in more than 100 countries.

work we’re doing results in something the

leadership in their category, and are often used

consumer values,” says Knauss. “There’s a lot

by retailers to generate in-store traffic and bring

to look forward to in the next 100 years.”

YEARS

OF INNOVATION F

“To deliver on our mission of making everyday lives better every day, we relentlessly focus our innovation efforts on solving consumers’ and customers’ unmet needs.” Chris Vickers Tucker and Mike Pilato.

- Chris Vickers Tucker, President, Clorox Canada

rom ingeniously redesigned spray bottles to groundbreaking product categories, unique innovations have shaped Clorox’s 100-year history. The company has consistently led the way over the last century by turning

smart ideas into products that enhance life, solve everyday problems, and grow categories. “We really leverage innovation across The Clorox Company,” says Mike Pilato, Vice President of Sales for Clorox Company of Canada.

production and fewer trips from the plant to retailers’ shelves. “The compaction of bleach allowed us to save over 50

go, and Clorox delivered. Last year, responding once again to consumers’ desire for products that deliver quality and value, Clorox launched its Smart

“From new products to product and supply chain improvements, we’re always looking for ways to do things better.”

million gallons of water a year, and also reduced the weight

Tube Technology, designed to dispense the very last drop of

that we need to ship,” says Knauss. “At the same time, there’s

Clorox spray cleaners.

Innovation continues to drive the company as it

provide insight into customers’ issues, while our

more efficacy for the consumer in terms of use of product.

enters its second century. Today, Clorox invests

product supply people can share ideas on how we

So it’s a big environmental win, and a big consumer win.”

two per cent of annual sales in research and

might improve our processes.”

development. Two years ago, the company

The company’s diverse portfolio of brands

Another recent market success for Clorox is Glad Trash

“Consumers often complain that they can’t spray the product at the bottom of the bottle,” says Knauss. “So we listened to them and created a Smart Tube that’s wrapped and

Bags with Febreze. Clorox leveraged its deep consumer

built into the side of the bottle, and can get right to the product at the bottom.”

invested $50 million on a new, state-of-the-art

also gives it a competitive edge in research and

insights to develop a solution that meets consumers’ need

innovation centre that houses about 1,000

development because technology and know-how

for odour elimination in their waste. The company was able

scientists, as well as Clorox team members from

can often be applied across brands and product

to partner with Procter & Gamble Co. to infuse Glad trash

DNA, and a key driver for growth today and in the future. To

departments ranging from sales and marketing

lines. For example, a technology used in Hidden

bags with Febreze scents. Combining the strength of Glad

enhance its ability to capture and execute on the next big idea,

Valley Salad Dressings helped Burt’s Bees make body

with the odour-eliminating technology of Febreze has resulted

Clorox has established an open innovation program that taps into

lotions that naturally moisturize for up to 24 hours.

in strong growth in a very mature category.

partnerships with inventors, universities and other companies.

to finance and product supply. “What we found is your ability to innovate increases when you put the different functions

The company’s commitment to research and

Clorox’s recent launch of Brita Bottles has expanded

For Clorox, says Pilato, innovation is part of the corporate

The company has also set up external networks and forums for

together in the same physical space,” explains

development has yielded an impressive array of

the water filtration category, allowing consumers to filter their

Knauss. “With the new centre, our scientists are

industry-leading innovations, each designed to

water while “on the go.” For the many consumers who filter

constantly interacting with people who can help

respond to consumers’ desire for quality and value.

water in their home, there was no option to do this away

them define what problems we’re supposed to be

Clorox gave the world disinfecting wipes, and

from home. Clorox developed a line of reusable water

define new ones,” says Pilato. “Our mission statement is ‘making

solving. For example, our sales and marketing

transformed bleach into an ultra-concentrated product

bottles with replaceable filters, reducing the need for bottled

everyday lives better, every day,’ and we do that by constantly

that delivered better results in smaller quantities –

water. Consumers were asking for Brita water while on the

coming up with innovative products.”

people who are on the frontlines every day can

a development that also meant less water needed in

consumers and anyone with a bright idea that can lead to meaningful new products. “We leverage innovation to grow mature categories and

INNOVATION Burt’s Bees® Lip Shimmer A kiss of colour and pearlized shine add a hint of glamour to our worldfamous lip balm. Nourish, moisturise and soothe your lips with natural ingredients like vitamin E, and coconut and sunflower oils. Choose one of 10 classic shades or try our two new vibrant looks for 2014: Apricot, a trendy coral; and Grapefruit, a frosty light pink.

Burt’s Bees® Brightening Dark Spot Corrector – Infused with Daisy Extract, this dark spot correcting serum is the perfect natural solution for creating a luminous complexion. Clinically proven to even skin tone, 80% of women saw diminished appearance of dark spots and discolouration after using Burt’s Bees® Brightening Dark Spot Corrector.* *After 8 weeks of use.

Following the launch of the squeezable Brita® Bottle and Kids’ Bottle, the new Brita® Hard Sided Bottle comes with a firm exterior and built-in straw and filter to allow for easy drinking and portability.

Give hair a foaming, cleansing experience that’ll leave it smelling smelltastic with güd Pearanormal ActivityTM Natural Nourishing Shampoo. Created by the makers of Burt’s Bees® with the ofthe-moment woman in mind, the new collection includes all the “güd” stuff of sunshine and laughter, none of the bad. No parabens, no phthalates, no petrolatum, never tested on animals – No way!

Glad® kitchen catcher bags with febrezeTM freshness help to neutralize kitchen trash odours. And with the Easy-Tie® closure, you just tie, grab and toss.

NEW GLAD® Stand-up bags enable the bag to stand upright for more space and storage capacity. Bags are available in three sizes: small, medium and large.

Introducing a slice of high-end water filtration design. The new Brita® Stainless Steel Water Filtration Pitcher is a space-saving solution that fits perfectly in today’s modern kitchen, whether in the refrigerator or on the dinner table.

Clorox® All-Purpose Disinfecting Cleaner is a bleach-free and streak-free spray cleaner that cuts through grease and grime throughout the house. Equipped with Clorox®’s revolutionary new Smart TubeTM Technology bottle, it delivers better value, reliability and an overall better usage experience.

NEW Clorox® Kitchen Cleaner is a floral scented kitchen cleaner with bleach that cleans tough messes and is safe for use on granite and stainless steel. The revolutionary new spray bottle uses the patented Smart Tube™ Technology by Clorox® to deliver better value, reliability and usage experience for you.

Don’t go around in circles looking for the lid! NEW GLAD® MatchWare™ containers solve the mismatch problem with easy colour-match lids that perfectly complement patterned containers.

Glad® compostable bags provide the quality and strength you need to hold all your kitchen scraps and green bin items. GLAD® bags are BPI certified, and neutralize odours with the power of febrezeTM freshness, helping to eliminate even the smelliest kitchen odours.

FOR THE AGES

NEW Clorox® Disinfecting Wipes On-the-Go is a convenient, re-sealable pack of 34 freshsmelling, disinfecting wipes. These wipes kill 99.9% of household bacteria, making this To Go pack great for cleaning and fighting germs both inside and outside of your home. Pack them when you travel, keep them in the car or stash them in your purse — anywhere dirt and germs may build up throughout the day.

NEW Liquid-Plumr® Hair Clog Eliminator™ is specifically designed to eliminate tough hair clogs. It clears partial hair clog in 15 minutes to restore the flow in your drain, and is safe for all pipes, basins/ sinks and septic systems.

Revitalize floors, kitchen counters, and add a burst of morning freshness to your bathroom surfaces with NEW Pine-Sol® Mandarin Sunrise™ Multi-Surface Cleaner. It is safe on wood*, and cleans and deodorizes with the power you expect from Pine-Sol®, leaving behind a long-lasting, invigorating citrus scent, so you know your home is clean. *Not recommended for wood that is unfinished, unsealed, unpainted, waxed, oiled or worn

Formulated especially for high-efficiency machines, the NEW Clorox® Bleach Gel for Laundry is a thick bleach gel that comes in an easy-to-grip container with a precision pour spout. This minimizes splashing and gives you better control to clean, whiten and remove stains.

Clorox® Bleach Foamer is an innovative bathroom cleaner that delivers serious cleaning with less scrubbing for your bathroom surfaces with its foaming bleach action. The revolutionary new spray bottle uses the patented Smart Tube™ Technology by Clorox® to deliver better value, reliability and usage experience for you.

The most trusted brand of bleach for your laundry now comes in smaller, easier-touse packages that have all the cleaning power of bigger bottles. The new concentrated formula of Clorox® Bleach is easier to pour*, and allows you to get the same number of uses with all the great cleaning and whitening results you expect from Clorox® Bleach. *Vs. previous Clorox® Bleach

“We needed to find a way to get a lot of bleach out to various organizations such as the Red Cross and to retailers who told us they needed to increase their inventory. We focused on the task for two days, and made sure as much bleach as possible got to Alberta. It was an amazing thing.” In the end, Clorox gave Albertans 25,000 bottles of Clorox bleach and 24,000 boxes of 100-count Glad trash bags. It wasn’t the first time Clorox has come to the aid of communities – and it won’t be the last. From its early years, Clorox made a commitment to be a good corporate citizen – one that does the right thing for its community. Its first recorded act of corporate giving dates back to 1921, when it donated funds to the Boy Scouts of America. Over the decades, Clorox has continued to do the right thing – from supporting family health and education to being there to help when disaster strikes communities. “We have a core set of values that we live and breathe every day,” says Pilato. “Doing the right thing is one of those values, and it’s something we continually emphasize and live by every day.” Clorox formed The Clorox Company Foundation in 1980, with a mandate to fund programs that

Foundation in 1980, with a mandate

decades, the Foundation has given more than $91 million in cash grants to

to fund programs that serve youth,

non-profit organizations, schools and colleges.

education, and cultural and civic

Clorox also encourages and supports employee giving to the community through its GIFT (Get Involved for Tomorrow) Campaign – a program that sees Clorox Canada employees celebrate the company’s 100 year anniversary

Clorox match employees’ donations to any non-profit organization. “We raised $4.5 million for our most recent GIFT Campaign,” says Knauss.

community commitment

the

Doing

RIGHT thing

Clorox formed The Clorox Company

serve youth, education, and cultural and civic groups. Over the last three

groups. Over the last three decades, the Foundation has given more than $91 million in cash grants to non-profit organizations, schools and colleges.

he Clorox Company was in the thick of

year-end activity when the Great Flood of 2013 devastated large swaths of Alberta, forcing

William Osler Health System Foundation

Habitat for Humanity

Supporting Youth

Together we make a difference

thousands of people to flee their homes. “We literally just stopped what we were doing in the middle of year end and said, ‘we have to do the right thing now,’” recalls

Whether it’s donations of money, time or products, Clorox and its employees have been there to pitch in when needed. In recent years, they’ve helped victims of Hurricane Ike in Texas, Superstorm Sandy in the eastern United States, and the Great Flood in Alberta. Last year, the company sent 48,000 litres of bleach to Argentina, where nearly 500,000 people were affected by floods. It also continued to help fight a cholera epidemic in Haiti, sending a second donation of more than 1,000 cases of Clorox bleach to the Caribbean country. When Typhoon Haiyan hit the Philippines, Clorox immediately gave $150,000 to the American Red Cross Pacific

Mike Pilato, Vice President

Typhoon Fund, and donated thousands of litres of bleach. The company also provided relief goods for families of

of Sales for Clorox

distributors affected by the typhoon. “Clorox is truly a part of the local and global community, and we believe we

Company of Canada.

have a role to play in strengthening our communities,” says Pilato. “I feel really proud to be part of this company.”

Driving Sustainable Strategies T

he world’s leading provider of cleaning products also works hard at keeping the planet clean

and green. As it has grown its business over the last century, Clorox has put in place programs and

Clorox into a health and wellness company. With brands from Burt’s Bees and Brita to Hidden Valley, we’ve broadened our definition of health and wellness to Clorox products being around me, in me, and on me.” - Don Knauss

how we do business,” says Knauss. “Through

bags. This product, today, remains unique in Canada.” - Mike Pilato

helping consumers reduce their use of bottled water, saving energy as well as the use of petrochemicals to make plastic.

programs across the country for the past 15 years. Recognizing that consumers are most likely to recycle

With Burt’s Bees and güd, Clorox promotes the use of

when armed with the proper material and tools, Clorox works

personal-care products made with natural ingredients and

to ensure retailers’ shelves are well stocked with whatever

packaged sustainably using recycled and bio-degradable

recycling material their communities need – whether that’s

material.

blue recycling bags, compostable bags, or clear bags. “So

For the Glad business, new technology is being used to

when consumers walk into their local retailer, they’re buying

remove 6.5 per cent of the plastic required to create the

products they can actually use because the retailers’ shelves

we work to reduce the impact of our

brand’s base trash bags, diverting 6.5 million pounds of plastic

are aligned with local recycling programs,” says Pilato.

operations and of the products we make.”

from landfills, or the equivalent of 140 million trash bags per

These efforts are just a few examples of the many ways

year. Clorox has steadily reduced packaging material for its

Clorox is helping to protect the environment, says Knauss.

its commitments to reducing greenhouse

Glad trash bag over recent years. A large percentage of

With environmental sustainability built right into the

gases, waste, paper, water and energy use,

product packaging and retail display material is now made

company’s business model, retailers and consumers can

and to ensuring its manufacturing opera-

with recycled content.

expect more good things. “We’re making significant progress

tions do no harm to biodiversity and natural habitats. From 2007

Clorox is also leading the sustainable charge with Glad

to 2012, the company saw improvements in all areas, with

compostable bags – an innovation that is proudly made in

reductions of 26 per cent in greenhouse gas emissions, 22 per

Canada. Instead of putting their compostable food waste

cent in water use, 27 per cent in solid waste to landfill, and

straight into bins – which inevitably become smelly and

15 per cent in energy use.

slimy after a few days – many Canadians are now lining their

At the same time, Clorox concentrated its Clorox bleach

decompose along with the organic waste at their municipal

carbon footprint while delivering greater convenience to the

composting facility.

consumer. The company’s commitment to protecting the

on our commitments,” says Knauss. “And we’re continuing to push towards our goals.”

food waste containers with Glad compostable bags, which

formula by about one-third, reducing the product’s overall

To help ensure this innovation accomplishes its primary

planet extends across its entire product portfolio. Green Works

goal – to encourage more Canadians to compost – Clorox

products, which derive at least 95 per cent of their ingredients

worked with municipalities across the country to make sure

from natural sources like coconuts and lemons, hold the

the new bags would be accepted by all composting facilities.

distinction of being the first natural cleaning line made by a

“We were the first country to launch Glad compostable

major consumer packaged goods company to be featured in

bags in the marketplace,” says Pilato. “This product today

the mainstream cleaning aisle.

is a market leader and remains unique to Canada.” Pilato says

Through its Brita pitchers and reusable bottles, Clorox is

launch Glad compostable

our environmental sustainability strategy,

As part of this strategy, Clorox defined

practices to reduce its impact on the environment.

“Over the years, we’ve reshaped

“Environmental sustainability is integral to

We were the first country to

the company has also been helping to develop waste diversion

Focus on diversity

Hunter Straker

Embracing diversity and multiculturalism isn’t new to Clorox. As early as the 1920s, the company printed

instructional pamphlets on the home use of Clorox bleach in French, German, Italian, Polish, Spanish and Yiddish – all for consumers who were living in the United States. Today, says Pilato, Clorox continues to find ways to connect with its diverse markets. Two years ago, for instance, the company invested significant resources to learn more about Chinese and south Asian consumers in Canada. The findings helped Clorox ensure it was marketing products that were relevant to these consumers. “We found insights that really helped to drive the business,” says Pilato. “For example, we uncovered insights on the importance of water in the Chinese culture, so we decided to focus on Brita in that community. We launched a new Brita pitcher that celebrates Chinese New Year, and have engaged in an entire sponsorship program of Chinese events. We’ve seen tremendous growth in Brita sales among this demographic as a result of our efforts to understand and build relationships in this community.”

Congratulations

A culture of respect & strong values

CLOROX

100 Great Years! ON

A commitment to delivering great products has propelled The Clorox Company to success over the last century. But there’s another element that’s been critical to the company’s growth: a corporate culture focused on nurturing strong relationships with employees, suppliers, retailers and consumers. The company that established its brand by giving samples of its original product to homemakers continues to believe in the human factor as a key driver of business. “This company has an amazing people-focused culture that really

sets it apart from other companies,” says Pilato. “I think anyone who works here will tell you how valued they are.” Knauss points to the four values that define the company’s culture: do the right thing, stretch for results, take personal ownership, and work together to win. These values challenge Clorox employees to work individually and collectively to achieve the best results for the company, but always with integrity and accountability.

From Your Friends At

“Receivable Deduction Specialists” Philip Covshoff, President Tel: 416-409-8640 • Email: philip@claimsrecoverygroup.com www.claimsrecoverygroup.ca

“This company has an amazing people-focused culture that really sets it apart from other companies.” – Mike Pilato

clorox congratulations

100 on your

anniversary

Ultimately, says Knauss, the company’s culture is built on respect. “Fundamentally, if you have basic respect for people, it drives engagement,” he says. “We have smart people everywhere in the company; let’s respect them and let them get their ideas forward.” This also means respecting – and encouraging – diverse thinking. Clorox also puts great value on its relationships with suppliers, business partners and retailers. Many of these relationships have lasted for decades. For example, the lead ad agency Clorox uses today can trace its roots back to the first ad agency that the company hired during the Roaring Twenties. Clorox also has relationships with food brokers that date back 90 years or more. “At the end of the day, we’re really all about people,” says Knauss. “The most important assets we have are people – they

from your friends at

created the brands, so there wouldn’t be any brands without them. And without the relationships we have with our suppliers, our retail partners, and our consumers, The Clorox Company wouldn’t be here today.”

Clorox Canada Strategic Leadership united grocers inc.

CANADIAN LEADERSHIP TEAM

and its members

would like to

CONGRATULATE

CLOROX th

Chris Vickers Tucker President

Mike Pilato Vice President Sales

Soula Kioussis Vice President Specialty

Katie Renner Vice President Cleaning

on its

Guido Romagnoli Vice President Professional Products Division

Darren Bowen Vice President Product Supply

anniversary Faroek Hanif Vice President Finance

Lori Galati Aguiar Vice President Human Resources

SALES LEADERSHIP TEAM

Mike Pilato Vice President Sales

Bobby Ramnarine Manager of Sales Finance

Scott MacLaughlin Sales Director

Heather Edgar Sales Director

John Marley Sales Director

Brent Falvo Sales Director

Chantal Gagne Sales Director

Jim Slomka Sales Director

Robert Brunet Sales Director

Ken Anderson Sales Director

100+

COUNTRIES WHERE CLOROX PRODUCTS ARE

MARKETED

$91

MILLION*

*Amount the Clorox company foundation has awarded to nonprofits since its founding in 1980

GLOBAL MANUFACTURING PLANTS

3 Million+ Fans on Facebook

CANADIAN

BRANDS

300+

Canadian Employees

Professional productsLeveraging expertise

GLOBAL RESEARCH & DEVELOPMENT FACILITIES

THE CLOROX COMPANY BY THE NUMBERS

8,400

YEAR SALE ST S IR

$7,996

Employees Worldwide

YEAR SAL ST ES LA

$5.6B

F RTY INTERNATIONAL BRANDS

Since its first jug of bleach came down the factory conveyor belt in 1913, Clorox has grown into the most trusted name in household cleaning and laundry products. But did you know that Clorox products were originally created for commercial sanitizing and disinfecting? Today, this century-old heritage lives on with the company’s Professional Products business, which has a portfolio that includes top brands for professional infection control, as well as for food service and commercial cleaning and maintenance. “We saw an opportunity to leverage our expertise in disinfecting products to address the needs of healthcare facilities and food-service

establishments,” says Knauss. “Today, we have a great lineup of professional disinfecting products that kill germs that make people sick.” In Canada, Clorox’s professional products range from Clorox Healthcare disinfectants to Pine Sol and S.O.S. cleaning solutions and steel-wool soap pads. These products – most of which are Health Canada-registered disinfectants – can be applied in a variety of professional and commercial settings, including hospitals, long-term-care facilities, doctors’ and dentists’ offices, childcare centres, schools, offices, and restaurants. “We’ve branched out from being a company that sells to retailers into an organization that sells to hospitals, doctors’ offices, restaurants, hotels and other institutions,” says Knauss. “We’re no longer just in your homes; we’re also in your community.”

“ We know our advertising in GROCERY BUSINESS MAGAZINE is effective” States, Sharon Baingan, National Sales Director, Organika Inc. “Our ad looked great and we were thrilled to have received calls from retail buyers who had seen our advertisement for our recently launched, Organic Coconut Palm Sugar and Coconut Vinegar products, in Grocery Business”.

Organika has evolved over 20 years to a world class manufacturer and distributor of superior health products selling to retail food stores around the globe. For more information regarding Organika, go to www.organika.com or call 604-277-3302. For more information on Grocery Business, go to www.grocerybusiness.ca or call 416-817-5278.

LIST IT

New and now products

Melitta Single Serve New box format

Gluten Free Bisquick Same great taste, now gluten free

More than 70 per cent of consumers look for a box when they need coffee for their Keurig brewers. Keurig’s new box format features bold graphics that instantly communicate “Fits Keurig” to customers. Boxes can be double stacked for greater shelf efficiency. melitta.ca

General Mills is expanding its gluten-free portfolio with new Gluten Free Bisquick, a versatile mix that’s great for pancakes, waffles, biscuits, and more. Made with rice flour in an entirely gluten-free facility. bisquick.com

Fisherman’s Friend Improved twin-packs

Astro Original Greek

Discover the indulgent flavours Thick and deliciously creamy, Astro Original Greek yogourt is now available in four decadent dessert flavours: Banana Cream Pie, Cherry Cheesecake, Vanilla Crème Brûlée and NEW Raspberry White Chocolate. Made with natural ingredients, Astro Original Greek is high in protein and gelatin free. astro.ca

January | February 2014

Fortun’s Finishing Touch Sauces featuring

New hanging bag twin-packs on Fisherman’s Friend Original Extra Strong and Cherry Sucrose Free lozenges contain two individually resealable packages for increased consumer appeal and convenience. The packs are fully peggable for merchandising in the hanging bag section. facebook.com/FFCanada

Chef-inspired recipes

Kevin Fortun and many top chefs combined their creative culinary expertise and spent years perfecting these sauces. To ensure that each recipe starts with the best, the proprietary chicken, veal, or beef stock is roasted right from the bone to become restaurant-quality bases. Rich, authentic, natural ingredients and spices are added at just the right time to complete the chef-inspired finishing touch. alaskanwaterseafood.com

grocerybusiness.ca

January | February 2014

The Consumer

BRANDSPARK’S

Brings you Quality & Convenience

CANADIAN SHOPPER STUDY 2014

A proud Canadian brand, Janes makes high quality fish and chicken products for families looking for nutritious yet convenient meals. Janes’ fish products are all wild-caught, MSC-certified, whole fillets, never minced. And our chicken burgers, strips and nuggets are 100% all-white meat. Other benefits include being trans-fat, preservative and artificial flavour free, while being low in saturated fat.

BrandSpark International’s annual Canadian Shopper Study – examining the shopping habits of more than 100,000 Canadians – has found that the majority of consumers are using their smartphones to make purchasing decisions, and most Canadians are committed to living healthier lifestyles. The survey found that the most recent global economic crisis continues to have an impact on

Check out some new and some improved products from Janes:

KEY SHOPPER ATTITUDES & BEHAVIOURS

Three popular whole muscle products now offer more value. Janes Cracked Black Pepper Chicken Strips, Janes Chicken Breast Fillets, and Janes Garlic & Pepper Fillets now include our specially developed Signature Sauce, created especially to enhance the flavour of Janes products. Now in a 1-kg pack.

NEW

Janes Battered Fish Bites and English Style Fish Value-priced products that are a source of DHA Omega-3. Battered Fish Bites are bite-sized pieces of fish, ideal for dipping or in fish tacos. English Style Fish are large, battered fillets.

NEW

January | February 2014

will stock up when one of their favourite products is on sale

try to buy enough food to prepare meals for at least 3-4 days study flyers/circulars, promotions, and discounts before their shopping trips

Janes Ultimate Chicken Burger

Janes Natural Goodness Chicken Strips and Nuggets Two options for consumers looking for convenient, back-to-basics foods. Minimum ingredients. Maximum taste!

Introducing Janes Ultimates Battered Chicken Breast Fillets with Signature Sauce – Our newest addition to the Janes family of whole muscle chicken, these tender chicken fillets are wrapped in a light, crispy batter. There is nothing else like it!

76 % prefer purchasing brand name products that are on sale rather than private-label/store brand products

71%

think that convenient food is usually not the healthiest

Sofina Foods, Inc.

think that shopping for food products is a time to explore and learn about what’s available

grocerybusiness.ca

are concerned about food safety

NEW

100% all-white meat, these fun-shaped chicken nuggets will appeal to children.

86 82% %

78%

Ready for the grill, this burger is now juicier, with an improved taste and texture.

Disney Cars Chicken Nuggets

Janes Panko Breaded Fillet of Sole and Janes Multigrain Haddock Both of these favourites have been improved with updated coatings. Fillet of Sole features a light panko breading, with a hint of lemon; Multigrain Haddock has a delicious breading that includes ancient grains, quinoa, and millet.

Canadians’ purchasing decisions, with 33 per cent of respondents saying they are less loyal to companies now than before the last recession. The BrandSpark Canadian Shopper Study is Canada’s most comprehensive source of insights about Canadian shopping habits for everyday food and beverage, health and beauty, household, and kids’ products.

go to multiple stores to get the best deals

that ethnic food products are culturally authentic

54% have used their smartphone to make a purchase decision

49% say it takes too long

consider price to be the most important factor in their food purchase decisions

56% consider it important

purchase the same brand name products on a regular basis

to earn rewards through loyalty programs

33% say they want to be

the first person among their friends and family to try new products.

18% rarely cook from

scratch when the same thing is available ready-made in the supermarket

January | February 2014

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

Custom Publishing with a fresh take quality content + award-winning design

CONTACT:

Kevin Smith 416-569-5005

Karen James 416- 561-4744

Dan Bordun 416-817-5278

kevinsmith@grocerybusiness.ca

karenjames@grocerybusiness.ca

danbordun@grocerybusiness.ca

The

GOLDEN PENCIL AWARDS

November 25, 2013, Toronto: Dino Bianco of Kraft Foods and Eric La Flèche of Metro Richelieu Inc. were honoured with the prestigious Golden Pencil Award.

01 Dino Bianco, Kraft Foods; Paul Higgins Jr., Mother Parkers; Tim Berman, Kraft Foods

09 Tim Berman, Kraft Foods; David Wilkes, Retail Council of Canada 10 Ken Schley, Quality Foods; Dino Bianco, Kraft Foods; B.K. Sethi, UNFI

02 Eric La Flèche, Metro Richelieu; Paul Higgins Jr., Mother Parkers; Pierre Lessard, Metro Richelieu

11 Blair Ruelens, Pepsico; Lem Janes, Janes Family Foods, Nancy Croitoru, FCPC

03 Steve Turner, Matt Blixt, Lisa Wernham, Kruger Products

12 Bill McEwan, Elaine Smith, Tim Penner

04 Prior Golden Pencil Award inductees

13 Mike Lovsin, Freson Bros.; Tom Barlow, CFIG; Frank Lovsin, Freson Bros.

05 François Bouchard, The Country Grocer; Margaret Hudson, Burnbrae Farms

14 Bobby Ramnarine, Jim Slomka, Clorox; Michael Marinangeli, MIDEB Consulting; Chantal Gagne, Mike Pilato, Clorox

06 Denis Gendron, UGI; Michael Marinangeli, MIDEB Consulting

07 Al Tyreman, AWT & Associates; Karen James, Grocery Business

15 Eric La Flèche, Metro Richelieu; Robert Coallier, Agropur; Shelley Broader, Walmart Canada

08 Diane Brisebois, Retail Council of Canada; Eric La Flèche, Metro Richelieu

05 07

14 09

16 Anthony Longo, Longo’s; Philip Donne, Campbell Company of Canada

PHOTOS: RODNEY DAW

January | February 2014

grocerybusiness.ca

it figures >

28%

Focus on

Loyalty Programs Takeaway Where do they spend the

other 86% and why? Itâ&#x20AC;&#x2122;s important to understand your consumersâ&#x20AC;&#x2122; need state, and then create a loyalty program designed to grow basket size.

When it comes to loyalty program importance, grocery products come second to gasoline purchases

Gasoline

vs.

January | February 2014

more to younger families, while reward points attract older, higher-income crowds. Plan your incentives accordingly, and make them easier to redeem.

20%

of consumers consider switching to, or shopping more often in, a store because it offers a loyalty program

are more likely to shop at a store because it offers a loyalty program

Grocery

Takeaway Loyalty programs drive traffic, so make it

Takeaway Know your customers and what drives them. Free stuff appeals

47%

42%

a seamless experience and give the consumer the option of a physical card or a digital app to increase convenience and usage.

Takeaway Incentives + in-store

80%

69%

of consumers redeem incentives

Free products trump reward points when talking about loyalty program incentives

The average consumer spends 14% of their shopping dollars in a particular store

53%

of consumers choose free stuff over reward points

Only

of grocery cardholders report that they always use their cards

experiences are key consumer motivators when consumers decide where to shop.

97%

of Canadians participate in a loyalty program: +3% from 2008. The average consumer has at least 6 loyalty cards and carries 3 of them in their wallets. Takeaway Consumers are more involved than ever in

loyalty programsâ&#x20AC;Ś so how does a retailer stand out? Remember that the experience in the store is the key to repeat trips and a loyal consumer.

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.

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

grocerybusiness.ca

Carman Allison

January | February 2014

We’re celebrating 50 years as the voice of the natural health industry.

With a membership of over 1,000 members and an industry that is poised for incredible future growth, we are proud to present our largest Western trade show to-date. If you haven’t experienced CHFA West, now is the best time to come and see what we are all about.

Vancouver Convention Centre West Building Conference April 10 & 11 Trade Show April 12 & 13

A must attend event for buyers of natural health products, natural & organic foods, natural personal care and eco household products. • Discover future best-sellers from hundreds of companies • Engage with more than 650 exhibitors all under one roof • See, taste and compare local and international brands • Enjoy savings exclusive to show attendees • Attend free product education sessions from leading industry figures • Join in the fun at the many receptions and parties

BE AT THE HEART OF THE NATURAL PRODUCTS INDUSTRY • natural health products • health and beauty • sports nutrition • specialty food • nutraceuticals • organics

CHFA West Conference – April 10 & 11 • Trade Show – April 12 & 13 Vancouver Convention Centre, West Building

FOR COMPLETE DETAILS AND TO REGISTER VISIT chfa.ca CHFA trade shows are not open to the public. Proof of industry status is required in order to gain admission to the conference and trade show. For additional information on the show and our show policies, please visit chfa.ca

Our Greatest Catch is Quality

YOUR SEAFOOD SPECIALIST Alaskan Water Seafood is an exclusive distributor of unique quality seafood and proven value added items never before offered to the Canadian market. Our state of the art in house cold storage and logistics facility is capable of supplying and servicing multi-chain national and regional programs.

WE OFFER • AWS Brand of long line frozen at sea chemical free sustainably caught Halibut, Salmon, Sole, Pollock, Cod and Haddock fillets and portions • Fortun Foods gourmet line of soups and sauces • Pier Fish's extensive program of re-fresh and frozen value added seafood items • Year round availability • Stable Pricing and Quality Guarantee! 250 Summerlea Road, Brampton, Ontario, Canada L6T 3V6

• Programs and pricing for evey size of client

TF 1.877.334.3663 P 905.828.FISH (3474) E info@alaskanwaterseafood.com W alaskanwaterseafood.com